Updated at: 08/21/2013 3:05 PM
(AP) WASHINGTON - A mobile marketing company will refund consumers and pay $1.2 million to the Federal Trade Commission as part of a settlement over claims that it added unwarranted charges to consumers’ cellphone bills.
The company, Jesta Digital LLC, also does business as Jamster. According to the FTC, it ran phony virus-scan ads on consumers’ Android phones while they played Angry Birds. The ads falsely claimed that there was a virus on the consumer’s phone. Clicking on the ads led users to screens that promoted protecting Android mobile devices from viruses. If consumers clicked anywhere on these screens, Jesta charged them $9.99 per month directly on their mobile bill for ringtones and other content.
And if consumers actually attempted to subscribe and download Jesta’s software to their mobile devices, the download often failed, according to the FTC.
Jesta did not respond to a request for comment Wednesday after the FTC announced the settlement.
However, the company itself was aware of the issue, according an email quoted by the FTC. In the agency’s complaint against Jesta, it quoted a vice president of the company saying that another executive was "anxious to move (Jesta’s) business out of being a scam and more into a valued service."
Under the terms of the proposed settlement, Jesta will pay $1.2 million to the FTC and provide refunds to affected consumers. The FTC said it does not know exactly how many customers are entitled to refunds, but believes it will be a "substantial" payment on the company’s part.
Consumers who were billed between Dec. 8 of 2011 and Tuesday for any service based on claims that its device was infected with malware or that Jesta would provide software to protect it from malware will be automatically refunded by Jesta.
Due to a record keeping issue, only some consumers billed between Aug. 1, 2011 and Dec. 7 of that year are due a refund. These consumers may have seen a code of 75555 on their bills. Consumers from that time must contact Jesta at 866-856-5267 or by email at info(at)jamster.com and make a refund request.
The proposed order is subject to court approval.
Consumers with questions about the case or the refund process may contact the FTC for more information at 202-326-3523.
(Copyright 2013 by The Associated Press. All Rights Reserved.)