The owners of an Atlanta company have agreed to settle U.S. Federal Trade Commission charges that they crammed US$10 million worth of charges onto mobile phone users' bills without their permission.
The two settlements, one with Wise Media and its CEO Brian Buckley, and one with owner Winston Deloney, permanently ban them from placing any charges on consumers' telephone bills or helping anyone else do so, the FTC said in a press release. The settlements also prohibit them from using any other method to charge consumers for goods or services without ensuring that they are aware of the terms of the purchase and have agreed to be charged, the agency said.
Wise Media's Georgia phone number has been disconnected, making the company unavailable for comment.
The case is part of the FTC's efforts to apply consumer protections to developing mobile technologies, the agency said. "This case involved a new delivery system for an old-fashioned scam," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Getting consumers' consent before charging them is as basic a consumer protection as you'll find, whether you're dealing with a brick and mortar store or with a mobile payment provider."
The FTC alleged that Wise Media billed consumers for so-called premium services that sent text messages with horoscopes, romance tips and other information. The operation placed repeating charges of $9.99 per month on mobile phone bills, without consumers' knowledge or permission, the FTC alleged.
The settlement with Wise Media and Buckley includes a judgment of nearly $11 million, which is partially suspended due to the defendants' alleged inability to pay the full amount. Buckley will be required to surrender nearly all of his assets along with any remaining assets of Wise Media, valued at more than $500,000.
The settlement with Deloney and Concrete Marketing Research, another relief defendant charged with receiving ill-gotten gains from the unlawful conduct, requires them to pay nearly $176,000.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is [email protected]