Premium text messages prompt complaints, lawsuits

People are finding charges on their mobile phone bills that they say weren't authorized, including mystery text services that appear out of nowhere and charge for content that people believed was free.

I was the victim of a scam recently in which $9.99 was charged to my cellular account for so-called "inspiration" text messages for which I definitely did not sign up. The phone, a BlackBerry on Sprint, is a second phone kept around for emergencies only and had not been used for about a month before the text messages were noticed.

I halted the service by texting "STOP" and called the company listed as the provider, InspiraCell, to find out why they had signed me up for this inane service. I couldn't get through then (or as of this writing). I next called Sprint to ask them about it. A customer support representative put a block on the service, removed text message service entirely from the phone and told me I would be able to get the charge removed from my bill when the statement came, which I was. However, he was not able to tell me how the charge got authorized for my account.

I then called Sprint public relations to ask about the situation. Typically, "scammers can use some type of auto dialer" to compile their list of numbers to charge, said Sprint spokeswoman Crystal Davis. They know that a certain block of three-digit numbers that follow the area code are allocated for cell phones and they just try them with different combinations, she said. It's hard to tell exactly how my number got signed up for the service because the premium text campaigns are managed by aggregators, so Sprint did not deal directly with InspiraCell.

I'm not the only one who has been signed up for this unexpected text service. While the complaints all seem to come from people who say they did not do anything to initiate the service or charge, some people say their carrier did not remove the charge like mine did.

Meanwhile, Verizon Wireless and the Texas attorney general's office have filed lawsuits against three dozen defendants, including an Arizona company named Jawa (PDF) and alleged shell companies and business associates. The lawsuits accuse them of failing to adequately inform people that they would be charged monthly fees when they signed up to get lyrics, news alerts, and other information delivered to their phones. The practice is commonly known as cell phone "cramming," according to the Texas lawsuit (PDF).

In many cases, the defendants had taken out ads that would appear at the top of Web search pages for popular search terms, the lawsuits allege. Clicking on the ads led to a Web page that prompted visitors to provide their mobile phone numbers in exchange for access to the information. A text message with a PIN would then be sent to the phone number and the recipient would have to type the PIN in to the Web site to authorize the service.

The services typically cost $9.99 a month, however that was not clear, according to the lawsuits. Either the site did not mention pricing or it was in tiny text hidden in a grayed-out area of the screen so it was difficult to see, the lawsuits allege. And pricing also was not prominently displayed in the text messages sent to recipients, the suits allege.

"The pricing should be crystal clear to the person typing in their phone number and when they get the text message," said Leigh Schachter, assistant general counsel at Verizon. "These folks were circumventing our monitoring program by showing auditors one thing and blocking them from seeing the noncompliant Web sites" that customers were seeing.

Jawa has filed a counterclaim defending its practices as the standard "double opt-in" process and accusing Verizon of disparaging its business and manipulating at least one of the screenshots to blur out the pricing information. Verizon makes about 30 percent from each transaction, which represents about $30 million since Jawa began the services in 2008, the company said in its counterclaim. Judges in both Texas state court and federal court in Arizona have so far refused to bar the defendants from conducting business with Verizon customers, Jawa said.

"We honor a 'no questions asked' money-back guarantee for anyone who is not 100 percent satisfied with our services," Jawa founder and Chief Executive Jason Hope said in a statement. "Jawa is the gold standard of customer service."

Protecting yourself
While these lawsuits wind their way through the courts, here are some comments and tips from each of the cellular providers, including how to prevent being duped by scams and what to do if you find charges on your bill that are unexpected.

Verizon lawyer Schachter said people should look at their bills closely every month. Customers who feel they signed up for premium text services without understanding the charges can submit a claim form at premiumsmsrefunds.com.

T-Mobile said in a statement that it "is committed to providing the best customer experience in wireless and does offer customers at no additional charge the ability to block chargeable text messages, MMS, IM, and e-mail from being sent to their handsets." Customers can contact Customer Care or a retail sales representative for assistance or help themselves with tools at myt-mobile.com/.

AT&T said it is investigating the allegations Verizon has made against Jawa and in the meantime has suspended the short codes identified in the complaint along with others. AT&T has safeguards in place to protect customers, including requiring that a customer take an affirmative action, by sending a text message or entering a code on a Web site, before a third-party provider can sell content or services. Third-party providers must also make information on pricing and how to unsubscribe clear.

AT&T's Web site has tips for how consumers can protect themselves, including request that third-party charges be blocked from your bill; avoiding placing calls to 900 numbers; and always reading the fine print to understand what you are signing up for.

Sprint spokeswoman Davis said customers can ask Sprint to block particular providers or campaigns by reporting to Sprint the short code, which is the five-digit number used to communicate with the provider via text. Customers can report problems via e-mail to abuse@messaging.sprintpcs.com.