How $9.99 per Month Apparently Grew to Over $10 Million, and a Settlement with the FTC

How $9.99 per Month Apparently Grew to Over $10 Million, and a Settlement with the FTC

 A lot of people seem to like paying a few dollars for “premium services” for their smartphones so they can receive text messages with horoscopes, flirting and love tips, and other information.  Apparently, a lot of people also get billed for these services whether they want them or not.

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

The two settlements, with Wise Media and its chief executive officer, Brian M. Buckley, and with 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 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 sign up consumers across the country for premium services and that it 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, the FTC said, was partially suspended due to the defendants’ inability to pay the full amount. Under the settlement, Buckley must 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.  

 Contact the author at smeyerow@optonline.net

For more information about LexisNexis products and solutions connect with us through our corporate site.