On September 25, 2018, the Federal Trade Commission announced that it is sending out 22,671 refund checks to people who lost money to a mobile cramming operation that placed tens of millions of dollars in charges on their mobile phone bills without their permission.
The refunds stem from a major FTC crackdown first announced in 2013.** As part of the scheme, the defendants sent text messages containing celebrity gossip alerts, horoscopes, or “fun facts” to consumers and placed monthly subscription fees for these “services” on their mobile phone bills without their authorization. The practice of placing unauthorized charges on a consumer’s mobile phone bill is known as mobile cramming.
This is the third round of refunds issued as part of the FTC’s crackdown on mobile cramming. The latest round of refunds, totaling $2,107,156.24, comes from assets recovered as part of a settlement with Tatto, Inc. The average check amount is $92.95.
According to the FTC, recipients should deposit, or cash, checks within 60 days, as indicated on the check. The FTC never requires individuals to pay money or provide account information to cash a refund check. If recipients have questions about the refunds, they should contact the FTC’s refund administrator, Epiq, at 888-457-2202.
For additional information, see Tatto, Inc., also d/b/a Winbigbidlow and Tatto Media, et al.
**In December 2013, the FTC announced that it took action to stop a mobile phone cramming operation that has placed tens of millions of dollars on consumers’ mobile phone bills without their permission. In its complaint, the FTC sought to shut down the operation and recover money lost by consumers.
The FTC’s complaint charged that Lin Miao and Andrew Bachman, through a number of companies they owned and controlled, pitched “love tips,” “fun facts,” and celebrity gossip alerts sent by text message to consumers, but placed monthly subscription fees for these “services” on consumers’ mobile phone bills without their authorization. The practice, known as mobile cramming, relies on the fact that consumers often don’t closely examine their monthly statements, or many assume that charges are legitimate.
According to the complaint, consumers, allegedly, received text messages with random factoids that they dismissed as spam without realizing they had received them through a paid subscription service they did not knowingly buy. The defendants also allegedly used misleading website offers to obtain valid consumer phone numbers that they used to sign up consumers for their services without their knowledge.
In one instance, a website told visitors they had won free Justin Bieber tickets, which they could claim by filling out an online quiz. Part of the process required consumers to enter their phone number, and while consumers did not receive the Justin Bieber tickets, their phone numbers were likely signed up for one of the defendants’ paid services.
The charges continued to appear on consumer bills, until the consumers noticed them and took action to unsubscribe. The charges, typically $9.99 per month, often appeared on consumer bills with enigmatic names like “77050IQ12CALL8663611606” and “25184USBFIQMIG,” and in many instances, consumers did not notice the variations in the amount of their bills from month to month.
When consumers noticed the charges, the process of getting a refund was often highly cumbersome. In some cases, consumers could reach representatives of the company, who would promise refunds that never arrived. In other cases, consumers were able to get partial refunds from their phone company, but only for a limited number of months – sometimes far less than the length of time they were billed. The number of consumers seeking refunds from their phone companies was as high as 40 percent in some months, and some carriers suspended the defendants from placing charges on consumer bills.
The FTC’s complaint alleges that the defendants violated the FTC Act by deceiving consumers, leading them to believe they were obligated to pay for the defendants’ premium text message services. The defendants, according to the FTC, also violated the FTC Act by unfairly billing consumers for services they did not ask for.
The listed defendants were Tatto, Inc. (also doing business as WinBigBidLow and Tatto Media); Bullroarer, Inc. (also doing business as Bullroarer Corporation Pty. Ltd.); Shaboom Media, LLC (also doing business as Tatto Media); Bune, LLC; Mobile Media Products, LLC; Chairman Ventures, LLC; Galactic Media, LLC; Virtus Media, LLC; Lin Miao and Andrew Bachman.