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August 12, 2014

Mobile Crammer Gets Busted by FTC

Mobile cramming — the practice of adding unsolicited charges to a phone bill — has been the source of disappointment for a large number of mobile subscribers in the United States for many years. The whopping amount of people who suffer from these small added charges is beginning to get the attention of government agencies and has been a subject of interest of the Federal Trade Commission (FTC).

Last week, Andrew Bachman, a person who has participated in and organized some of the most prominent mobile cramming schemes, has come under the hammer of the FTC. Jessica Rich, the director of the government organization's Bureau of Consumer Protection, said, “Ensuring that consumers are protected in the growing mobile environment is a top priority at the FTC. This settlement shows that we are committed to making sure that bad actors do not profit from taking advantage of consumers' confusion about their mobile phone bills.”

The judgment on Bachman had originally ordered him to pay up $97 million, but since he was incapable of paying the full amount, he is forced to surrender several of his most prized assets, valuing at just over $1.2 million. The assets include four bank accounts that total less than $4,500, a 2012 Ferrari 458 Italia, a 2012 Mercedes G550 SUV, his shares in several startups, and various pieces of jewelry.

The complaint by the commission was filed at the end of last year, accusing Bachman that he and other people put together an operation in which they would offer SMS-based “services” offering advice on romance, fun facts, and celebrity gossip. While there's nothing wrong with this, the services in question charged sometimes nearly $10 a month to customers without their express permission or knowledge.

As a result of this ruling, Bachman will be banned from placing charges on anyone's phone bill. And, will also have to get explicit consent from consumers when charging them for a product.

Edited by Maurice Nagle

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