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FTC strikes at 'cramming' mobile scammers

17 Apr 2013
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The US Federal Trade Commission (FTC) has begun a legal effort to take down firms which use deceptive and fraudulent tactics to overcharge mobile users with premium services.

The FTC said that it has filed suit against Wise Media LLC as well as two additional individuals who are charged with using a practice known as 'cramming' to charge users for premium services without their knowledge or permission.

According to the FTC, the company would use deceptive or in some cases completely unauthorised access to sign mobile users up for services such as SMS horoscopes and other 'spam' text content without their prior approval.

The Commission alleges that the company also used deceptive labelling and identification on bills in order to prevent users from spotting and reporting the unauthorised charges. Users who asked to be removed from the service were also reportedly still charged the monthly fees.

"The concept of 'cramming' charges on to phone bills is a not a new one," said Edith Ramirez, chairwoman for the FTC.

"As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the Commission will continue its efforts to protect consumers from their unlawful practices."

The use of premium-dialling tools and tricks has become an increasingly common problem for users as the transition to smartphones continues in the consumer space. Shady vendors have crafted thousands of applications which abuse user permissions in order to sign up subscriptions for the unwanted premium services.

Several such applications have been spotted bypassing access controls on popular mobile download services and in some cases are also circulating on unauthorised third-party marketplaces.

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Shaun Nichols
About

Shaun Nichols is the US correspondent for V3.co.uk. He has been with the company since 2006, originally joining as a news intern at the site's San Francisco offices.

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