Submission Number: 564482-00002
Received: 3/19/2013 12:11:58 PM
Commenter: Krishna Natarajan
Agency: Federal Trade Commission
Initiative: FTC to Host Mobile Cramming Roundtable; Protecting Consumers in the Mobile Marketplace; Project No. P134803
Attachments: No Attachments
I had a mysterious charge for $9.99 a couple of years ago on my cellphone bill. It was a charge made by 'Media Breakaway' for a 'Text Quiz Service' which I never joined. I complained to my provider at that time (T-Mobile) and they were able to take this charge off my bill. I contacted an attorney regarding this and he said that I cannot sue the company for cramming because I was repaid the money billed.
This makes for a PERFECT Scam: anyone who complains about the charges gets repaid, so they are not eligible to sue. The rest of the victims who did not look at the small charges on their cellphone bills - do not even know that they are being crammed. Even if any one person tries to sue them, the amount in each bill is so low that it does not even qualify for many small claims courts. But the amount these companies these companies make from hundreds of thousands of small charges must surely add up to several millions every month.
I did some research on Media Breakaway and found that the CEO of this company is Scott Richter, who has been indicted for spamming (sending unsolicited emails) in several lawsuits. Now he has turned his business to scamming people using lax regulation of premium texting services. He was nicknamed "the spam king" at one point of time.
The service providers also seem to be getting a cut of the charges from cramming (please see below article). They do not seem to have any/little legal liability from this, so they are being complicit. They can easily go through their customer complaints to see if the problem lies with any third party and cut off ties with this third party. They have taken absolutely no action to do so.
Here are some articles from reputed sources which support my findings:
The FTC should take severe action against this kind of scammers and also make the cellphone providers responsible for preventing unauthorized charges on their customers' cellphones.
The irony about this company "Media Breakaway" in particular is that it has an A+ rating on Better Business Bureau website, since it returns the money to every person that has identified the cramming charge on their cellphone bill. The real victims don't even know that they are being scammed.