Cell phone owners who hastily pay their monthly bill may want to slow down and pay closer attention to the itemized charges, as a growing number of consumers complain that they're being billed for services they never authorized or used.
Buried deep in pages-thick bills lurk charges from third-party companies such as Jamster, Flycell, Blinko and other providers of ring tones, wallpaper and other options that are easily overlooked. Some charges come from the carriers themselves.
The amounts are typically small often less than $10 a month but to the many who insist they got nothing in return, the charges smack of a widespread white-collar scam.
"There's a real lack of adequate disclosure," said JoAnn Carrin, a spokeswoman for the Florida attorney general's office. Her agency is investigating allegations of fraud against Blinko, a company formerly known as Dirty Hippo.
The probe centers on negative-option subscriptions, which are services that automatically take effect unless the consumer rejects them.
"People don't realize once you give them your credit card number, they pretty much can charge you with anything they want," Carrin said.
The Federal Communications Commission received more than 10,000 complaints in 2005 from cell phone customers who were unhappy with rate or billing practices.
As the number of cell phone users continues to explode, with more than 207 million subscribers in the United States alone roughly 70% of the nation's population so do add-on services, such as the option of downloading popular songs for ring tones or games such as Texas Hold 'Em.
In fact, ring tone revenues account for roughly 40% of a $1.8 billion cell phone entertainment industry, according to the Yankee Group, a Boston-based wireless research firm.
Jared Humphrey thought it would be fun to have his cell phone sound like a police siren when it rang, so he responded to a Jamster TV ad he thought was offering a free ring tone. When he learned it would cost $2.99, he said, he canceled his order. Months later he was still being charged, he said.
Humphrey was so irked by Jamster's tactics that he started an online petition called "Stop Jamster" aimed at changing the way the company runs its business. So far nearly 2,000 people have signed it, adding comments about Jamster such as "misleading, deceptive, frauds and cheats."
"I thought it was kind of scandalous," Humphrey said. "Once you've sent an initial text message, it's almost impossible to get in touch with them."
Milwaukee County Circuit Judge Elsa C. Lamelas of Shorewood complained to the Wisconsin Department of Agriculture, Trade and Consumer Protection and to the Wisconsin attorney general's office, calling Jamster's billing fraudulent, after her then-14-year-old son was charged $12 for ring tones he said he never downloaded.
Lamelas said her son responded to a cable TV ad to get a free ring tone by contacting Jamster on his phone, which he did. But when he learned there was a $1.99 charge, he rejected the offer, she said in a written complaint. Jamster continued to bill him for ring tones he never received, Lamelas said.
"While the amounts involved are not large . . . this conduct multiplied by the thousands, would result in a fraud of significant dimensions," she wrote.
Jamster denied any wrongdoing but ultimately refunded her money.
Jamster is also named in a class-action lawsuit in California that alleges the company, a subsidiary of VeriSign Inc., targets children with false advertising.
A Jamster representative called the lawsuit frivolous and said the company has never advertised a free ring tone.
"We believe it's very clear in our advertising . . . what the consumer gets," said Jamster spokesman Brian O'Shaughnessy. "The vast majority clearly understand what they're getting into."
Company changes practices
However, O'Shaughnessy said Jamster changed its advertising and subscription methods this year to make products and charges more transparent to consumers. Anybody who wants to download a ring tone or subscribe to any service now has to respond "yes" twice, he said.
"A lot of that (negative perception about Jamster) is residual stuff from the initial way this was represented," he said. "We've changed the way we presented this."
The Mobile Marketing Association, which establishes best practices for service providers, said the so-called "double opt in" subscription method is now the industry standard for any product or service that carries an additional charge.
"Since May 2005 . . . they all adhere to these guidelines," said Laura Marriott, executive director of the Boulder, Colo.-based association. "They have to adhere as part of membership. . . . As an industry, we're really trying to protect consumers."
Cell phone service providers such as Cingular, U.S. Cellular and others say they stress to parents the importance of talking to their children about what they can and can't do with their cell phones. More than 14 million cell phone users are between the ages of 8 and 17, according to a recent report by Advertising Age. From Milwaukee sentinel
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