Cell Phone Cramming Victims Aim to Collect $5 Million for Unauthorized Bill Charges

June 27, 2013 — -- After a federal judge gave the go-ahead for a class action claim against an alleged cell phone "cramming" scheme, the plaintiffs said they hoped to return money to customers who had unauthorized text charges on their phone bills, alleging at least $5 million in damages.

In October 2012, six plaintiffs sued Wise Media, a Georgia limited liability company, and its billing aggregators, alleging they received unsolicited text messages from the companies offering horoscopes, "flirting tips" and weight-loss advice, and celebrity gossip.

Such unauthorized "crammed" texts can not only lead to unsolicited purchases on a consumer's phone bill, but the messages can pile up fees for customers who do not have unlimited texting plans.

Wise Media's billing aggregators moved to dismiss claims against it, which included unjust enrichment and violations of state unfair competition laws, but U.S. District Judge William Alsup of the Northern California District said he disagreed last week.

One of the plaintiffs, Erik Kristianson of El Cerrito, Calif., said he was "very pleased" the judge permitted the plaintiffs "to continue pressing our case against both Wise Media and all of its billing aggregators."

Kristianson and his grandmother, Cathie O'Hanks, shared a mobile service plan, according to the lawsuit. He received an SMS text message from a five-digit number, 271-40, advertising a horoscope service, HoroscopeGenie, which offered three horoscope texts per week for $9.99 a month, the suit said.

Not recognizing the number, Kristianson responded that he did not want to be enrolled in the "HoroscopeGenie Subscription Plan," but he was charged $9.99 a month on his family phone bill, the lawsuit stated.

"Because of the voluminous nature of O'Hanks' mobile phone bill, O'Hanks did not discover the unauthorized charges for three months," the lawsuit said, claiming O'Hanks and her grandson never agreed to the charges.

"Mobile phone cramming is a serious problem today because many consumers don't notice unauthorized charges on their mobile phone bills," Kristianson said. "Through this class action, we hope to return money to all the consumers who had charges 'crammed' onto their mobile phone bills for bogus services they did not order."

An attorney for Wise Media, Michael Page, declined to comment.

In April, the Federal Trade Commission filed a case against Wise Media, its first case against an alleged mobile phone cramming scheme.

The case is pending in U.S. District Court for the Northern District of Georgia.

The FTC has not brought action against the billing aggregators.

"The concept of 'cramming' charges on to phone bills is a not a new one," said FTC chairwoman Edith Ramirez in April when the commission's lawsuit was filed. "As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the commission will continue its efforts to protect consumers from their unlawful practices."

Karl Kronenberger, one of the attorneys for the plaintiffs, said they allege "someone has created the perception that they have signed up for a website."

"This perception is created with these allegedly bonus text messages," Kronenberger said. "We allege nobody signed up but they create perceptions where they create these logs."

However, he said of his plaintiffs, "Nobody consented to receiving text messages. Nobody consented to paying $9.99 a month."

The plaintiffs estimate at least $5 million in damages, but, "we don't know the extent of the consumer harm," Kronenberger said.

If you receive unsolicited text messages, "there are actual damages if you don't have a text plan or statutory damages," he said.

While the defendants dispute those claims and a judge has not certified the plaintiffs as a class, Kronenberger said he is interested in talking to more potential plaintiffs to form a settlement class.

"As time goes on, we are learning more about the different variations in cramming, a variety of different products we did not know about," he said, such as more horoscope and love relationship tips. "And we think there may be other messages we don't know about."