Here at Ars, we’ve been covering the deceptive and downright shady practice of “bill cramming” throughout the last few years. In this scheme, consumers are billed for services that they never asked for, likely ignored, and yet continue to be billed for. (Ars editor Nate Anderson detailed his own personal experience back in 2008.) It’s happening in the ISP industry, in the landline telephone industry, and increasingly in the mobile phone industry too.
On Tuesday, the Federal Trade Commission (FTC) filed its first civil suit against Wise Media, LLC, a Georgia company accused of consistently engaging in the practice.
“Defendants 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,” the FTC alleges in its legal complaint (PDF).
“Defendants’ purported services have included sending periodic text messages containing horoscope alerts, ‘flirting tips,’ ‘love tips,’ and similar kinds of information. Using the billing mechanisms of mobile phone companies, Defendants cause unauthorized charges for these services to be placed on consumers’ mobile phone bills, often with abbreviated and uninformative descriptions.”
Ars attempted to contact Wise Media through every phone number we could find, but we kept getting disconnected or receiving other error messages.
A bunch of wise guys
Wise Media has a decidedly poor reputation online, as detailed on sites including the Better Business Bureau, Scambook, SMS Watchdog, and Ripoff Report. The organization was even detailed in a New York Times report in March 2012. As the newspaper reported then:
Wise Media, which records show is based in Atlanta, is the company behind HoroscopeGenie. A call to the company was fielded by Brian Buckley, who described himself as the chief operating officer. To get a sense of the place, the Haggler asked some basic questions, like how many people are employed at Wise Media, and how many SMS services does Wise Media provide?
That’s private, Mr. Buckley said.
Could he explain how Ms. Lindenmayer wound up paying for HoroscopeGenie?
No problem, he said. The company keeps careful records of who signs up for Wise Media products, and Mr. Buckley said he’d determine exactly when Ms. Lindenmayer became a HoroscopeGenie subscriber.
A day later, an e-mail arrived from “Compliance Team” at Wise Media.
“It is not our policy to share customer records,” it read in its entirety.
Well, how gallant. Wise Media, it turns out, doesn’t share much of anything. Including its address.
A class act
Wise Media is also involved in a California-based class-action lawsuit that was filed late last year. That case is set for a settlement hearing in early 2014. Michael Page, a San Francisco-based attorney, is defending Wise Media in this case. However, he told Ars that he is not representing Wise Media in the FTC case and does not know who is.
(Ars also reached one of the plaintiffs, Erik Kristianson of El Cerrito, CA, by phone on Wednesday morning. He declined to comment on the case.)
Court documents from that lawsuit allege that Kristianson received “an SMS text message from a five-digit number, 271-40. The text advertised a horoscope updates service (i.e., HoroscopeGenie), which offered three horoscope texts per week for a charge of $9.99 per month.)”
The complaint alleges that despite Kristianson's reply text stating that he did not want this service, he was nevertheless enrolled and charged $9.99 per month.
“We are very pleased that the FTC has filed suit against Wise Media, condemning the very same practices that we are challenging in our existing class action against Wise Media,” Jeffrey Rosenfeld, who represents the plaintiffs in the California suit, told Ars.
“Although the FTC has not named the aggregators who act as middlemen between Wise Media and the mobile phone carriers, as we have, we will continue to pursue our claims against Wise Media and its enablers, as well as other crammers we are currently investigating.”
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