Cramming scam: How closely do you check your cellphone bill?
11:56 AM, May 16, 2013
Millions of Americans use cellphones but we don't all pay close attention to the charges on our bill. You should because the FTC said you may be getting ripped off.
The widespread practice is called "cramming" and the FTC is getting more and more complaints about unauthorized charges piled on consumers' cellphone bills listed under generic titles like "subscription charges."
The illegal billing is becoming a big problem and now the government is ramping up its crackdown.
"One month of it being a little higher and we didn't think anything of it and it wasn't until three months of it being consistently higher that we finally looked into it and discovered we had been cramming victims," said Christie Hicks, a Chicago attorney who was the victim of the cramming scam.
Consumers can pay for services by having it tacked onto their cellphone bills.
In the days following Hurricane Katrina, text donations were billed to cellphone users with their permission. But the FTC said over the years, some companies with shady practices have taken advantage of the feature, capturing cellphone numbers through websites or mobile apps.
"Malicious software that's downloaded on your phone after you download an app and that gets your phone number and somehow you're signed up for some kind of service," said Hicks.
Once the questionable companies get your number, they cram on the charges.
"You had to actually dig through all 50 pages to find a single line that had this $9.99 charge on it," Hicks explained. Wise Media, the company Hicks said crammed her, is the first the FTC has gone after, filing a lawsuit in federal court.
The agency said Wise Media made millions and much of it was from unauthorized charges. Wise Media denies cramming customers and said the fees were for subscription services. An attorney for the company said customers who requested a refund received one.
But the FTC said this is just the tip of the iceberg and they plan to go after other violators, asking tougher questions for cellphone companies who they said get a cut of the charges.