For years, shady online companies lured mobile users -- often young teens -- into singing up for paid subscription services by promising “free” ringtones. Those practices led to crackdowns by law enforcement, but at least companies engaged in that kind of practice made a token effort to get people to opt in -- even if people were tricked into doing so.
Now some companies are going even further and actually signing people up for services that cost around $10 a month without first obtaining any kind of consent. Wise Media, based in Grayson, Ga., is one of those companies, according to the Federal Trade Commission.
In a complaint unveiled today, the FTC alleges that Wise Media and its executives and affiliates “operate a scam in which they bill consumers for text message-based subscription services even though the consumers did not authorize any purchase of the services.”
What kinds of services? “Horoscope alerts, 'flirting tips,' 'love tips,' and similar kinds of information,” according to the FTC's complaint.
Wise Media sometimes sends SMS alerts to consumers informing them they're now subscribers, but consumers assume those messages are spam, according to the FTC. In some cases, when consumers respond via text to say they don't want the services, they're charged anyway, the FTC alleges.
The agency estimates that Wise Media and its affiliates have made “millions” of dollars in the last two years. One reason the company is successful is that many consumers pay their phone bills without noticing the charges, according to the FTC. When consumers notice the unauthorized charges and protest, only some are able to obtain refunds, the FTC alleges.
The FTC plans to conduct a roundtable about “cramming” next month. Meanwhile, some observers are wondering why the carriers allow companies like Wise Media to continue to bill consumers. That's a good question. Hopefully someone -- the carriers, Congress, or other officials -- will have an answer soon.