Ringing Up Big Charges For "Free" Tones

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Every kid wants a special ring tone.

"What's wrong with the ringtones that come with the phone?" CBS News investigative correspondent Sharyl Attkisson asked teenager Kelsi Dolan.

"They're Beethoven!" Kelsi said.

So imagine Kelsi Dolan's excitement when she got a text message on her brand new phone.

"It said, 'you've qualified for a free ringtone,' and they sent it to me three times," Kelsi said. "So I asked my Mom if I could get it and she said 'no.' So I texted 'no' back."

But saying "no" wasn't enough. A charge for $19.99 showed up on her phone bill. When her mom tried to get it removed, her phone company told her it was a monthly subscription and it couldn't be stopped.

"I didn't even want a refund for the first month because I figured, 'okay, ya got me.'" Debbie Dolan, Kelsi's mother, said. "Fine I'll take the $20 hit. But when you're gonna keep doing it and you won't do anything to stop it?!"

It's called "cramming," Attkisson reports: Charges for services you didn't order and don't want that can be next to impossible to stop.

And it's not just happening to kids. Last year, the FCC ordered millions of dollars returned to angry cell phone customers who said they were scammed.

Rebecca Anderson did nothing more than search the Web for free ringtones. Then she, too, got hit by monthly charges.

"I did not agree to any charges. I did not download anything," Anderson said.

An innocuous-looking website run by a company called Ringaza. Peel away the layers of Ringaza and you find a man named Scott Richter, better known to some as "the King of Spam."

A few years ago, Richter was one of the biggest e-mail spammers in the world. He even paid a $7 million settlement over it. And now he's in the ringtone business. He didn't respond to our repeated interview requests.

But carriers like Ringaza owe some of their success to carriers like Verizon Wireless ... which agree to add the charges to your regular phone bill.

"If you believe that you've been charged in error or that you didn't subscribe, we'll credit that charge," said Verizon Wireless spokesman John Johnson.

Johnson says if you suspect fraud, all you have to do is call. But it's not always that easy.

"Verizon said that this was an outside carrier and they were not responsible for these charges," Anderson said.

And in Dolan's case: "They told me they wouldn't take it off and they couldn't stop it."

Couric & Co.: First-person accounts of cell-phone overcharge ordeals.
It turns out the big carriers are making money off the deal.

"What is Verizon's share?" Attkisson asked Johnson. "What kind of cut do you get from these bills?"

"I don't have a percentage," Johnson said.

"Does 30 to 40 percent sound accurate?" she asked.

"It doesn't sound unreasonable, but again I don't know," Johnson said.

It looks to the customers like Verizon or other companies may not be very responsive because they're getting a cut of the action.

"Well, sometimes it looks that way and that really concerns us," Johnson said.

Since CBS News first began working on this story, Verizon decided to change its policy. Customers can now block those unwanted charges.

And Kelsi is still looking for the right ring tone ... one that's really free.

If you think you've been a victim of a cell phone scam:

According to the FCC, Consumers may submit a general complaint to the FCC at: fccinfo@fcc.gov. If someone has questions or needs assistance filing a complaint, Consumer and Mediation Specialists are available Monday through Friday, 8 a.m. to 5:30 p.m. ET. Call Toll Free: 1-888-CALL-FCC (1-888-225-5322) voice, 1-888-TELL- FCC (1-888-835-5322) TTY.

Or check out the FCC's cell phone scam information page here.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.