Operator of Mobile Cramming Scheme Will Pay More Than $1.2 Million in FTC Settlement
Published on: 14th Aug 2014
The operator of a massive mobile cramming scheme has agreed to surrender more than USD1.2 million in assets to settle Federal Trade Commission charges, including the contents of numerous bank accounts, two luxury cars, shares in a number of startup companies and multiple luxury watches.
Under the terms of the settlement, Andrew Bachman will be permanently banned from placing any charges on consumers' phone bills, making any misrepresentations to consumers about a product or service or a consumers' obligation to pay, and will also be prohibited from charging consumers for a product or service without their express consent.
The settlement also includes a monetary judgment of more than USD97 million. The judgment is partially suspended based on Bachman's inability to pay the full amount, after he turns over nearly all of his assets.
Among the assets Bachman will be required to surrender under the terms of the settlement include a 2012 Ferrari 458 Italia.
The FTC filed its complaint against Bachman in December 2013, alleging that he and a number of other defendants pitched text message services offering "love tips," "fun facts," and celebrity gossip alerts, but placed charges for these services - typically $9.99 a month - on consumers' bills without their permission -- a practice known as mobile cramming. They also allegedly used deceptive websites designed to collect consumers' mobile phone numbers that would then be billed for the services.
The charges appeared on consumers' phone bills under confusing names such as "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 did notice the charges and attempted to seek refunds, the process was often highly cumbersome, with some promised refunds from the defendants never arriving, or consumers receiving only partial refunds from their phone company.
A settlement with a number of the other defendants in the case was announced in June, while the case against corporate defendant Bullroarer, Inc. is still in litigation.