What Does It Take For Mobile Operators To Care About SMS Cramming Scams?
from the scams-pay? dept
The various mobile operators have been making tons of revenue off of premium “short code” SMS programs. These are ways to add charges for various things directly to your phone bill. For example, they’ve become popular with various charities, so you can support them simply by texting a message to a particular short code. Of course, in many cases, the mobile operators charge you or take a cut for allowing this. And, of course, as with anything like this, it’s been left open to scammers… and those scammers have moved in. Just as we saw with phone service cramming, where charges would be added to your landline phone bill, there’s been a growing set of operations cramming premium SMS offerings.
Broadband Reports highlights the saga of JAWA, a Scottsdale, Arizona-based company that’s at the center of allegations of cramming. The company and a bunch of shells allegedly send text messages to people that say:
“Text back STOP if you don’t want to subscribe.”
Most people, of course, don’t text back because they think it’s a scam. What they don’t realize is that even if it’s a scam, it’s the not replying that lets the telcos start adding fees to your bill. The big question here: why does any mobile operator allow charges to be put on your phone bill for inaction?
The blog AZDisruptors (normally about Arizona startups) has been calling attention to the company, including putting together this video explaining how the cramming works, how JAWA’s CEO Jason Hope is apparently building the largest house in the US (complete with a 3-story night club), and how AT&T pretends (falsely) that it can’t do anything about it:
The thing is, JAWA has been doing its thing for quite some time. After Texas regulators began investigating, Verizon Wireless finally realized it needed to do something and sued. Amusingly, JAWA’s defense to the lawsuit appears to be that it employs lots of people and is good for Scottsdale. However, it also points out that it’s made Verizon Wireless tons of money, and even complains that Verizon Wireless seems to be withholding money owed.
While it’s nice that Verizon Wireless has filed suit, it appears this only happened after Texas regulators began investigating, and after they made money from JAWA for a period of nearly four years. AT&T now claims that it’s investigating too, but only after AZDisruptors demonstrated company representatives blatantly lying to him about whether or not they make any money from this and whether or not they can stop it.
The big question in all of this really should be why the mobile operators allowed this to happen at all. Why would they ever allow charges to be added to an account as a result of inaction, rather than through direct acceptance?