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Tech

California Man Hands Over Bentley and More to Settle Mobile Scam Lawsuit

Operators of a mobile-phone scam settle FTC charges for $10 million.

(AFP/Getty Images)

photo of Laura Ryan
June 13, 2014

An entrepreneur makes millions from unsuspecting victims in a mobile-phone scam. He drives a Bentley, jet-sets between his multiple homes, and collects jewels. But he is found out, and justice is served.

This isn't a movie plot. A Los Angeles-based entrepreneur will hand over more than $10 million in cash, real estate, and luxury cars to settle a lawsuit with the Federal Trade Commission for billing unknowing consumers millions of dollars on their mobile-phone bills, the consumer protection agency announced Friday.

According to an FTC statement, Lin Miao and a handful of Los Angeles-based companies made millions by sending text messages to consumers offering "love tips," "fun facts," and celebrity gossip. Little did the consumers know, they were charged as much as $9.99 per month for these services—a practice commonly known as "mobile cramming."

 

"Cramming unauthorized charges on consumers' phone bills is unlawful, and this settlement shows the FTC is committed to making sure that anyone who does it won't be able to keep their ill-gotten gains," Jessica Rich, Director of the FTC's Bureau of Consumer Protection, said in a statement. "Consumers have the right to know what they are being charged."

The charges were often unnoticed because they appeared on the bills in a vague or confusing form, according to the FTC's lawsuit. Customers who noticed the charges and asked for refunds never got them, according to the statement.

Miao and the other defendants are surrendering all of their assets because they cannot pay the full settlement price of more than $150 million.

The full list of assets include the cash in 14 bank accounts, five luxury cars (including a Bentley and a Mercedes), five properties in Chicago and Los Angeles, and Tiffany jewelery.

The FTC filed a complaint against Miao last year. The lawsuit is part of the FTC's crackdown on mobile cramming.

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