Facts

In 2014, the Federal Trade Commission filed suit against MDK Media Inc., Darcy Michael Wedd, Phwoar LLC, Fraser Robert Thompson, Ocean Tactics LLC, Erdolo Levy Eromo, Erdi Development LLC, Michael Pajaczkowski, Concise Consulting Inc., and MMJX Consulting Inc.

PLAINTIFF'S CONTENTIONS: The FTC contended that the defendants had used deceptive practices, including fake websites offering bogus gift cards and other items, to trick consumers into providing their mobile phone numbers; the defendants would then use the numbers to place monthly subscription fees for various services on the consumers' mobile phone bills without authorization. This process is known as mobile cramming, and the services charged for included celebrity gossip alerts, horoscopes, and other items, ranging in price from ten to fifteen dollars per month and renewed automatically. According to the FTC, the defendants made it difficult to dispute charges or receive refunds, and their deception caused substantial financial harm to consumers.

DEFENDANTS' CONTENTIONS: The defendants denied any wrongdoing or liability and all the plaintiff's material allegations.

Result

The parties agreed to stipulated permanent injunctions that banned the defendants from placing charged on phone bills, from misrepresenting any product or service, or from engaging in any unfair billing practices. Under the injunction, the defendants are also prohibited from using or benefitting from customer data collected, and they must destroy any remaining customer data. Monetary settlements and permanent injunction had previously been reached with six other individual defendants in 2015.