May 25, 2013

FTC Cracks Down on Cell Phone Bill ‘Cramming’ Scam


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Cell phone bills are steep enough as it is, but many consumers have had to deal with bills further inflated by scammers who use spam text messages to cram fraudulent charges onto them. Fortunately, the government is finally doing something about those spamming, cramming scammers.

The Federal Trade Commission said Wednesday that it was filing a lawsuit against Wise Media LLC to halt what it says are deceptive business practices. According to the complaint, Wise Media signed consumers up for subscription services costing $9.99 a month, then sent them horoscopes, love tips and other unsolicited content. These consumers were billed regardless of whether they responded to the texts.

As the FTC notes in a statement, many people don’t bother to check the details of their cell phone bills, so the extra charges often went unnoticed. And those customers who did notice the charges weren’t always able to dispute them.

The agency is seeking to freeze the company’s assets, and has requested that the court order it halt its “deceptive and unfair practices,” and require it to issue refunds to the scam’s victims.

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While this marks the first time that the FTC has gone after mobile scammers, the agency has tangled with crammers before: In January, it went after eVoice, which it said was sneaking monthly charges of up to $25 onto consumers’ landline phone bills.

Fighting these scams can be difficult: As the FTC notes, third-party businesses are able to add charges to your cell phone bill for what they say are legitimate subscription services. And as this lawsuit makes clear, simply responding to a text saying that you didn’t subscribe isn’t enough to make sure you aren’t charged. The agency recommends that you ask your carrier to block any number that tries to charge you. And if you find a mystery charge on your bill, be sure to report it to the FTC and follow your carrier’s instructions for disputing the charge.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

 

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Cell Phone ‘Bill Shock’ Is History as New FCC Rules Take Effect


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The days of opening your cell phone bill and getting slapped with unexpected charges should be over.

As of Wednesday, cell phone companies must send customers four types of alerts when they are in danger of being charged beyond their normal plan price. The practice, which tacks on unauthorized or misleading charges on a bill, is known as “cramming” and has been around for decades with landline phone bills.

A 2011 agreement between the Federal Communications Commission and major cell phone companies included today’s deadline that requires them to alert subscribers when they approach, reach and exceed limits on voice, data, text and international roaming charges. Carriers were required to provide two alerts by Oct. 17.

“This is very important consumer protection,” says Jack Gillis, Director of Public Affairs for the Consumer Federation of America. “The bottom line is that cell phone charging plans are so complicated it’s very easy to go over plans, especially with limited plans. This new requirement at the very least will save consumers thousands of dollars.”

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According to a 2010 FCC survey, 30 million Americans, about one in six mobile users, have experienced “bill shock,” a sudden and unexpected increase in monthly bills not caused by a change in service plans. In 2010, the agency showcased a 66-year-old customer’s plight of facing an $18,000 bill after a promotional, limitless data plan expired without warning as why more stringent notifications were needed.

The average wireless contract includes a flat fee for a set number of minutes and data each month and any usage that goes beyond the allotment is charged at a much higher rate. The surge in use of tablets has made consuming data and in turn, exceeding limits, much easier.

The FCC and Governmental Affairs Bureau held a workshop Wednesday on bill shock and cramming and according to attendee John Breyault, vice president of Public Policy for the National Consumers League, the FCC reported the number of complaints over mammoth fees has dropped significantly since October.

The NCL advocated for the new regulations to be implemented two years ago, and Breyault says the wireless companies reported being in full compliance of the alerts on Wednesday, which covers 97 percent of the carrier market.

In some cases when companies incur higher taxes or lose a revenue stream they are forced to increase prices to make up the difference, but Breyault says wireless caries did not view overcharges “as profit centers.”

“The dissatisfaction of consumers felts over charges had the companies introduce tiered data plans … there are still problems with these plans and whether or not they are adequate and will offer enough data at a reasonable price.”

Amy Storey, spokeswoman for the wireless association CTIA, told FOX Business that the cost for the alerts is not known, but carriers would not pass them along to consumers.

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California Judge Rules Motorist Can’t Use Smartphone Map


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By PAUL ELIAS

SAN FRANCISCO — Steven Spriggs was stopped in a traffic jam near downtown Fresno and thought nothing of whipping out his iPhone 4 and clicking on the map feature to see if there was an alternate route around the construction mess.

He was startled when he looked up and saw a California Highway Patrol motorcycle officer ordering him to pull over. He showed the officer that he was looking at a map and not texting or talking.

“‘Pull over,’” Spriggs recalled the officer as saying. “‘It’s in your hand.’”

A little more than a year later, Spriggs is at the heart of a novel court case that has technology blogs and social media sites buzzing about the $160 ticket plus court costs he was ordered to pay for “distracted driving.”

A court commissioner and then a three-judge appellate panel of the Superior Court found Spriggs guilty of violating a California law that bans motorists from texting or conducting phone conversations with hand-held devices.

The judges rejected Spriggs’ argument that they were expanding the law by refusing to toss out the ticket he got in January 2012.

Spriggs, who graduated from law school but isn’t a practicing attorney, represented himself before the commissioner and then the appeals panel. He initially brought a paper map to court to argue that it was legal to hold it while driving. Not persuaded, the traffic court commissioner found him guilty.

Next, he appealed to the three-judge panel of Fresno Superior Court, arguing in a legal brief that the iPhone has a flashlight feature and other functions that can be useful to a driver and aren’t as dangerous as texting or talking. That hearing last all of 30 seconds because no one from the CHP or district attorney’s office appeared to oppose the appeal by Spriggs.

He still lost.

Fresno County Judge Kent Hamlin, writing on March 21 for the three-judge panel upholding the commissioner’s ruling, said “the primary evil sought to be avoided is the distraction the driver faces when using his or her hands to operate the phone. That distraction would be present whether the wireless telephone was being used as a telephone, a GPS navigator, a clock or a device for sending and receiving text messages and emails.”

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The ruling doesn’t apply outside of Fresno County.

Nevertheless, Spriggs said he is troubled that police can now pull over motorists they suspect of simply holding their mobile phones.

Spriggs, a fundraiser for Fresno State University, said he’s unsure if he has the time or money to pursue further appeals to the California Court of Appeal and the state Supreme Court.

“I’m just a little guy who is frustrated,” Spriggs said. “I don’t see how they can extend this law.”

He actually supports the prohibition on texting and conversing on hand-held devices while driving, saying his adult son’s leg was badly broken in 2010 when he was struck by a motorist who was chatting on a mobile phone.

Judge Hamlin acknowledged in his ruling that changes in the law may be needed.

“It may be argued that the Legislature acted arbitrarily when it outlawed all ‘hands-on’ use of a wireless telephone while driving, even though the legal use of one’s hands to operate myriad other devices poses just as great a risk to the safety of other motorists,” the judge wrote in the March 21 ruling. “It may also be argued that prohibiting driving while using ‘electronic wireless communications devices’ for texting and emailing, while acknowledging and failing to prohibit perhaps even more distracting uses of the same devices, is equally illogical and arbitrary.”

But the judge said it’s up to the Legislature to amend the law. Until then, Hamlin wrote, courts are compelled to deem illegal nearly all uses of hand-held phone by motorists.

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With ‘Home,’ Facebook Barges in on Google’s Turf


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Marcio Jose Sanchez/AP HTC CEO Peter Chou, Facebook CEO Mark Zuckerberg and AT&T Mobility CEO Ralph De La Vega embrace during a product unveiling at Facebook headquarters in Menlo Park, Calif., on Thursday.

By PETER SVENSSON

NEW YORK — Facebook Home, the new application that takes over the front screen of a smartphone, is a bit of a corporate home invasion. Facebook is essentially moving into Google’s turf, taking advantage of software the search giant and competitor created.

Facebook Home will operate on phones running Google Inc.’s (GOOG) Android software and present Facebook status updates, messages and other content on the home screen, rather than making the user fire up Facebook’s app. The software will be available for users to download on April 12 and will come preloaded on a new phone from HTC Corp., sold by AT&T Inc. (T) in the U.S.

Google gives away Android, the most popular smartphone software in the world, in the hope that it will steer phone users toward Google services, such as Maps and Gmail, and the ads it sells. Compared to ads targeting PC surfers, mobile ads are a small market, but it’s growing quickly. Research firm eMarketer expects U.S. mobile ad spending to grow 77 percent this year to $7.29 billion.

With Home, Facebook is inserting itself between users and Google, diverting them to the social network’s own ads and services. It’s taking advantage of the fact that Google places few restrictions on how phone manufacturers and software developers modify Android. By contrast, Facebook Home wouldn’t work on the iPhone without approval from Apple Inc. (AAPL), and close collaboration with the company.

“Facebook Home can only reside on Android because only Google was daft enough to allow it,” said independent phone analyst Horace Dediu, via Twitter.

At the launch event Thursday, Facebook Inc. (FB) CEO Mark Zuckerberg said Google was aware of the project, but Facebook didn’t work them to create Home. Asked if he believed Google could change tactics and restrict apps like Home, he said it was theoretically possible, but highly unlikely for Google to do a “180-degree change” in its stance on Android’s openness.

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It’s not the first time a big Internet company has co-opted Android: Amazon.com Inc. (AMZN) has gone much farther with its Kindle Fire tablets. They run a version of Android that strips out all Google services, replacing them with Amazon’s equivalents. Barnes & Noble Inc. (BKS) does the same thing with its Nook tablets. These devices lie outside the Google system, whereas phones running Facebook Home still come with Google apps like Maps and the Play Store for music, movies and applications.

The Play Store has many examples of downloadable applications that modify the Android home screen — so-called “launchers.” Home, however, represents the first time a major Internet company and Google competitor has created a downloadable launcher.

J.P. Morgan analyst Doug Anmuth said Home may increase the pressure on Google to find ways to get people to spend more time on its Plus social network, which so far hasn’t been as magnetic as Facebook’s hangout. Anmuth also thinks the communication tools built into Home could decrease usage of Google’s Gmail and Gchat services.

But Zuckerberg said the app will help Google.

“I think this is really good for Android,” he told the audience at the launch event in Menlo Park, Calif. Developers do their best work on the iPhone first, but with Home, Facebook is putting Android first. If consumers want the Facebook Home experience, they’ll have to get an Android phone.

In a statement, Google seemed to agree. “This latest device demonstrates the openness and flexibility that has made Android so popular,” it said.

AP Technology Writers Barbara Ortutay and Michael Liedtke contributed to this report.

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‘Home’ Makes Facebook Your Phone’s Hub – and Puts Its Ads First


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Facebook Home
Marcio Jose Sanchez/AP Facebook CEO Mark Zuckerberg speaks at the company’s headquarters in Menlo Park, Calif., on Thursday. Zuckerberg says the company isn’t building a phone or an operating system. Rather, Facebook is introducing a new experience for Android phones.

Facebook fans who were expecting the social network to unveil its own proprietary smartphone Thursday have a long wait ahead of them, seeing the as company isn’t building a phone or an operating system.

Rather, explained CEO Mark Zuckerberg during a press conference at the company’s headquarters, Facebook (FB) is introducing a mobile experience it’s calling “Home,” which makes the social network the hub of any smartphone that runs Google Inc.’s (GOOG) Android operating system.

Zuckerberg said the goal is put “people before apps.” To achieve that, Home replaces users’ home screen on their phones and includes a suite of applications, or apps. As Engadget explains:

It’s not just a new user-interface for launching apps, however. It replaces the “lockscreen” with cover feed and prioritizes updates from people instead of apps. There is a standard paginated launcher that is always just a swipe away. But the focus is on the full-screen images that are your new welcome screen.

“What Facebook wants is to put itself at the front of the Android user experience for as many Facebook users as possible and make Facebook more elemental to their customers’ experience,” Forrester analyst Charles Golvin told The Associated Press.

As Fortune notes, Home is a way for Facebook to supplant Google by pushing the search-engine giant’s prized services, including search maps and Gmail, into the background on Android phones, pushing users to use Facebook’s offerings instead.

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Home will be limited to phones running the Ice Cream Sandwich and Jelly Bean versions of Android — i.e., 4.0 and later. That covers phones made or updated during the past year or so.

Initially, the app will be limited to specific Android models — about a half-dozen of them, including Samsung’s Galaxy S III and Galaxy Note 2. It will also work on the upcoming Galaxy S IV. In addition, HTC’s upcoming First phone will come with Home.

But the move could also help boost mobile advertising, a fast-growing field — thanks largely to Facebook and Twitter. Research firm eMarketer expects U.S. mobile ad spending to grow 77 percent this year to $7.29 billion, from $4.11 billion last year.

Showing more mobile ads to users poses challenges for Facebook, however, since the promotional ads may annoy or alienate Facebook users.

Check out Facebook’s Home:
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