Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
September 21, 2014

Jewelry, Mercedes, Real Estate to be Surrended in ‘Cramming’ Settlement

Defendants in a cell phone “cramming” case have settled with the Federal Trade Commission, and will surrender more than $10 million in assets.

It’s the latest in the agency’s actions targeting the practice of unauthorized charges to phone bills.

Back in December, the FTC filed a complaint charging that several companies and two individuals had been operating a scam of “billing consumers for text message-based subscription services even though the consumers did not authorize any purchase of the services” and made millions of dollars from it:

Defendants’ purported services have included sending periodic text messages containing celebrity gossip alerts, “fun facts,” horoscopes, and similar kinds of information. Using the billing mechanisms of mobile phone companies, Defendants have been causing unauthorized charges for these services to be placed on consumers’ mobile phone bills, often with abbreviated and uninformative descriptions. Many consumers have paid their mobile bills without ever noticing these charges; others have paid and then unsuccessfully have disputed the third-party charges without obtaining a refund; still others have disputed the charges and succeeding in having them removed only after substantial effort.

The settlement covers the bulk of the companies and one of the people the FTC says is involved, and according to the agency, the assets they’ll surrender include:

  • the contents of 14 bank accounts and one life insurance policy, less $5,000;
  • five real estate properties, including three in Chicago and one in each in Los Angeles and Beverly Hills;
  • four vehicles, including a 2013 Mercedes SUV, a 2014 Range Rover SUV, a 2011 Audi and a 2008 Bentley; and
  • numerous items of jewelry, including three Patek Phillippe watches, a Tiffany watch, two Tiffany rings with 10 and eight carat diamonds, a pair of six-carat Tiffany  earrings, and a Tiffany necklace, bracelet and diamond bracelet.

Under the settlement, the defendants are banned from billing charges on phone bills, making false or misleading statements about any products or services and from billing consumers without their consent.

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