A man who used to serve as CEO of a mobile content company was recently convicted following customer auto renewal claims. More than eight counts of criminal activity were lodged against the company owner.
Auto Renewal Claims Lead to Lawsuit
The auto renewal claims were based on allegations from consumers that they were fraudulently assessed charges on their phone bills without giving the authorization to sign up for the service in the first place.
A previous jury had deadlocked in the auto renewal claims lawsuit, but this most recent case ended with convictions for allegations of more than $100 million in claims. The chief operating officer and the company already faced claims previously for their “premium text offering” program.
The company was known as Mobile Messenger and users were charged $9.99 each month for the premium content. Many consumers who were concerned about their auto renewal claims said they only noticed the charges after an in-depth review of their statements. Many consumers never saw the charges.
Other companies facing auto renewal claims operate with a similar mentality to charge a small amount each month that is likely to go under the radar for consumers. Some of the common types of premium text content included celebrity news and horoscopes.
All eight counts led to a conviction in this case, including aggravated identity theft, conspiracy to commit money laundering, conspiracy to commit wire fraud, and wire fraud. The auto renewal claims allegedly affected hundreds of thousands of customers.
Prosecutors carrying out the investigation of auto renewal claims said that the company’s officers were living a lavish lifestyle with the funds illegally obtained from consumers.
At least six other co-defendants have already pled guilty in the case and one more was already convicted in a case that concluded over the summer. Government authorities argued that the top officers in the company were in communication regularly about what they were pulling off.
This case concludes as a number of other lawsuits based on auto renewal claims emerge throughout the country. While consumers have become savvier about identifying unauthorized charges in recent years, many discover they’ve lost money months into a scheme.
While all these charges are based on relatively small amounts of money, when hundreds of thousands of consumers are affected, the money earned by the company is quite high. Prosecutors, consumers, and consumer advocacy groups are taking allegations of auto rewnewal claims more seriously than ever.
Some states, like California, are leading the way in terms of auto renewal legislation that’s designed to curb the activity before it starts and to empower consumers with options if violations have occurred.
If you or someone you know believes you have grounds to take legal action based on auto renewal claims, you need to set aside time to talk with the experienced legal team at Bradley/Grombacher- fill out the form located on this page to learn more about your options.
The auto renewal claims lawsuit is U.S. v Wedd et al. Case No. 1:15—cr-00616, filed in the U.S. District Court for the Southern District of New York.
Note: Bradley/Grombacher is not representing the plaintiff in this lawsuit.