Markets Wired

The operators of an Atlanta-based company have agreed to settle Federal Trade Commission allegations that they crammed charges on consumers’ cell phone bills without their consent, causing more than $10 million in consumer injury.

The two settlements, with Wise Media and its CEO, Brian M. Buckley, and Winston J. Deloney, permanently ban them from placing any charges on consumers’ telephone bills or assisting anyone else in doing so. 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 expressly agreed to be charged.

This case is part of the Commission’s ongoing efforts to ensure that consumer protections keep pace with developing mobile technologies.

“This case involved a new delivery system for an old-fashioned scam,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “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’s complaint alleged that Wise Media billed consumers for so-called “premium services” that sent text messages with horoscopes, flirting and love tips and other information. The Commission’s complaint alleges that consumers across the country were signed up for these services, and that the operation placed repeating charges of $9.99 per month on mobile phone bills, without consumers’ knowledge or permission.

The settlement with Wise Media and Buckley includes a judgment of $10,965,638, which is partially suspended due to the defendants’ 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 in excess of $500,000. The settlement with Deloney and Concrete Marketing Research, LLC, a relief defendant charged with receiving ill-gotten gains from the unlawful conduct, requires them to pay $175,817.
           
The Commission vote approving the proposed stipulated judgment was 4-0 It is subject to approval by the U.S. District Court for the Northern District of Georgia.

NOTE:  Stipulated judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.