FTC Expands Case Against Text Spam and Robocall Network with New Mobile Cramming Charges

In a significant update to its ongoing case against scammers exploiting text messages and robocalls, the Federal Trade Commission (“FTC”) has added charges of mobile cramming to its complaint. This new development highlights the growing concern around unauthorized charges on consumers’ mobile bills as part of deceptive schemes involving free gift card and prize offers. The case, which initially focused on the use of misleading text messages to lure consumers into signing up for costly subscriptions, now also includes allegations that consumers were unknowingly enrolled in premium services through mobile cramming. The amended complaint reveals how scammers used enticing offers such as $1,000 gift cards or free iPads to trick recipients into submitting personal details, including their mobile phone numbers. Once consumers followed the links in the unwanted text messages, they were prompted to provide additional personal information, under the guise of shipping the "free" gifts. However, what followed was far from a genuine giveaway. In many cases, after submitting their mobile numbers, consumers were instructed to confirm their information by entering a PIN on a website. What they did not realize was that by confirming their phone number and entering the PIN, they were unknowingly subscribing to premium text messaging services that resulted in an unexpected charge of $9.99 per month on their phone bills. The FTC’s complaint alleges that the scammers failed to provide adequate notice of these charges, with the crucial information often buried in small print at the bottom of the screen or hidden behind a separate hyperlink.