premium SMS scams

[Commenting on this post is closed]

Mobile phones are an interesting technology. They can be used not just as a means of communication, but increasingly as a payment system. Each advance in communications and payment systems technology is inevitably exploited by the unscrupulous (think of fax spam, email spam, telemarketing, premium 1900 numbers; counterfeit currency, cheque fraud, credit card fraud, debit card fraud, identity theft and fraud associated with PayPal and other online payment systems). Eventually this behaviour is recognized and the public is usually protected from these scams by new laws, different business practices or consumer behaviour or technological solutions. We haven’t got there yet with mobile phones. In Australia, ordinary people are still very vulnerable to premium SMS scams. Email spam is annoying enough. Comment spam on blogs can be quite vile – although I’m happy to say TypePad is much improved in this area. Unsolicited SMS (also known as text - and txt at Vodafone) is particularly annoying, and it is certain to become even more prevalent. But can you imagine receiving unsolicited spam which charges you content charges for the honour of receiving the spam? Essentially, that is what premium SMS scams are about.

There are lots of different ways of getting hooked with premium SMS. Maybe you found a web site offering a “free” ringtone or picture, not knowing that you would then be getting a charged one every day, costing $A 3 each, every single day. Alternatively, you entered a competition or survey associated with a TV program or a radio station, and you then start receiving these crappy SMS jokes or horoscopes or news headlines. Each one costs 55 cents and you get one every single hour. I can accept that there could be a legitimate business in providing premium SMS services, so long as it’s transparent (“by entering this competition, you are agreeing that you want to receive an update every 30 mins, and that each update will cost you 55 cents”) and it's easy to unsubscribe from. Currently most premium SMS services are not like this at all. The customers never knew they were being charged for these SMS until they notice that their balance has sunk like a stone. There is never any mention of ways of unsubscribing from the premium SMS, particularly when an SMS only has 160 characters. The messages only stop when the customer’s balance has been completely wiped out. As soon as the account is recharged, the premium SMS starts again. If you get a monthly bill, your next bill will be a real nightmare. I have seen a lot of examples of this in my job at Vodafone. I would love to be able to just refund the charges, but they not charges made by the phone company, but by the premium SMS companies. They charge Vodafone, and we pass them onto the customer. Were we to just refund these charges, the company would lose a lot of money very quickly. I would like to block all premium SMS services if a customer requests this. Right now, that’s not possible, at least on prepay, which is my area of experience. I hope that there will be a way of doing this in the future. I think it’s inevitable, when the public outrage over premium SMS services grows, as it did in Japan and the UK. In the mean time, all I can is hope that the service is being sent by 5th Finger, one of the few companies which has made it easy to unsubscribe from premium SMS. But there are a lot of other companies out there who do this and don't make it easy to unsubscribe from. At Vodafone, we try to help the customer identify who might be charging them for these TXT, but then it’s up to the customer to contact these 3rd party operators and get them to stop. If that doesn’t work, the only thing you can do is block all incoming SMS or change your mobile number, two very drastic cures. The very worst SMS scam that I’ve heard about is the one perpetrated by sms.ac. [update on 6/10/04: please read the comments defending sms.ac, including one by Chris McKibbin, head of customer service at SMS.ac.] This is an American company that seems to be completely unreachable by Australian regulators.  If you ever get an SMS from them, or from one of your friends inviting you to join one of sms.ac’s discussion lists, delete it and hope you never hear from sms.ac again! It’s likely that the SMS invite from your friend wasn’t actually written by your friend, sms.ac just used their name. A disclaimer here: Without trying their services for myself, I don’t have much in the way of details. But I’m not about to put my head into the lion’s mouth on this issue, not unless somebody gives me and my friends some different sim cards to test them with. They have a very bad reputation on the internet. Only an idiot believes everything he or she reads on the internet or thinks that all the answers are there, but sometimes, for certain issues, there aren’t many viable alternatives. I’ve heard enough anecdotes from prepaid mobile phone customers about the impossibility of unsubscribing from sms.ac, and so that’s why I’m not even game to test them out. [update on 12/9/04: I just found a page on sms.ac's site providing short codes for cancelling their services] Here are some links that I found about this general topic: North Sydney Council launches world's largest mobile parking scheme. I used to a lot of research on payment system trends from 1999 to 2000. Before the dot com buddle burst, there was a lot of hype about "m-commerce" being the next big thing. Things like this and the mobile phone operated vending machines in Japan and Europe, show that mobile phones are being used as a payment system, just not quite in the manner or timetable that some people expected. Australian Competition and Consumer Commission page, Slam a cyberscam. If you have been a victim of an SMS scam, report it to the ACCC. People always under-estimate the power of goverments to do any good, but if they don't know about this problem, of course they can't do anything about it. Watchdog gets tough on text spam, the Register (24 September 2002). It's good to see that SMS spam and scams are being taken seriously in the UK. Discussion on Whirlpool forums about sms.ac, including the hint of stopping their premium SMS by sending an SMS to 188 1051 with the words "STOP". The most useful information is on the first page of this discussion, but I couldn't get a working link to that one. Rip-Off Report.com about sms.ac. There's a lot of dirt about this company here. I can't vouch for this link, but it's still worth a look and does contain a rebuttal by Chris McKibbin, head of customer service at SMS.ac.

Comments

[Faranaz Eskandary]

I received an email from a friend about sms.ac, and before I signed up, I did my research on the internet. I found both negative and positive comments on this service -- so I approached the service with caution.

I actually took careful notes within the sign up pages so I could refer back to what I had been told on their site to see if I had been misled.

I am not an expert on marketing laws, but I do consider myself to have common sense.

What I found was that they are trying to be clear about the fact that not all the services are free and that we consumers will be charged on our mobiles. Almost to a fault, as if they are aware about some of the negative postings.

Based on the number of times they mention the price of the service in the sign up process, at one point I remember becoming a bit annoyed as if they are being patronizing to me as if I'm stupid or 10 years old.

The conclusion I came to is that smsac may be a victim of the newness or novelty of premium sms. People just don't understand it, and even though they are told that they will be charged for services and they agree to it, somehow do not believe it since they have never seen this before. As internet users we're used to thinking that if we don't enter a credit card, we cannot be charged. It will take some time for people to understand that they indeed can be charged on their mobile phones.

I would give sms.ac a good score, but feel sorry for them for entering a market that is so new.

[Chris McKibbin]

My name is Chris McKibbin and I am the head of customer service at SMS.ac. I came across this posting on Google and I want to personally respond to the statements that are being posted here. Imagine someone blasting a company without even being “game to check them out.” The fact is that SMS.ac has become the largest community of mobile phone users in the world, because we provide great services… and when we fall short of customer expectations, we remedy the problem.

The reason I am posting here is to address your legitimate concerns. If you are having issues with our service, I am here to help. SMS.ac is not a scam. We are a young company and we are keen on improving. We have millions of registered members in more than 170 countries. And while having so many users around the world presents a huge challenge for my customer service team, we are working super-hard to answer every inquiry within 24-hours. What other company offers their customers a “no questions asked” refund? We don't hide that in small print, either. Have a look at the statement that is viewable by clicking the “help” button that is accessible on every page of our site: www.sms.ac.

Your satisfaction is our highest priority. If at any time you are not satisfied with our service -- FOR ANY REASON -- we will work around the clock to incorporate your suggestions, or even refund costs you have incurred in the last 30 days. That's our commitment to you, our customer.

SMS.ac welcomes constructive feedback as to how we can make SMS.ac even better. If you are already a member of SMS.ac and you need help, or have any questions or comments-- PLEASE contact us. I've set-up a special email mailbox for posters to this site, so that I can respond to you as quickly, as possible: smsfeedback@corp.sms.ac. As you can plainly see, we are hoping to hear from you.

Thank you for reading. With my regards,

Chris McKibbin

[Amy]

Chris, that is a lie. I used to work at sms.ac, and all the crap sms pulls is true and you know it. You run the "seeding" department and you know that each person is required to send 1000 fake messages a day because the amount of messages that actual members send is next to nothing. The alibi club?? Remember that one? the club that you started up in order to get on TV.

[sharon]

omg my friend told me about this today after i already signed in that shut.. i thought it might be of a help since with telus mibility in canada you cant really send text messages to other country to i was wondering it might be of a great help to me...omg..
how do i cancel this shit before it gets worse??
thank you

[John]

Don't worry...to get out just send STOP to 188 1051 to get the hell out of that scam.

[Saurav Sarkar]

I posted a few ways for people to respond to this and my own personal experiences at http://darkdaysahead.blogspot.com/2005/01/making-omelettes-from-egg-on-my-face.html. If you think it's appropriate, some of the ways to respond include contacting the company directly, filing a complaint with the california department of consumer services (that's the state sms.ac is based in), etc.

[Che]

I just want to clear one thing up about who charges what for Premium SMS. Yes there are some scams out there, but one thing that is misleading here is the statement that Vodafone does not charge for Premium SMS. Of courese they do and so does every other Telco. Typically 60% to 90% of all revenue generated by premium SMS goes back to the telco.

[morgan]

Fair comment. Although I vaguely suspected that the mobile carrier would get a cut of those charges, that information was never written down anywhere - and especially not the exact percentages, so I didn't have much in the way of details about that. The way that we were trained as call centre workers was as I mentioned - that these were billed by a 3rd party for charges incurred with them, and that Vodafone had nothing to do with these charges, other than that Vodafone was collecting the funds. The key thing was that when these charges are disputed, it is a primarily a matter between the customer and the third party provider, and that we were very limited in what we were officially allowed to do to resolve these disputes. From my point of view, any amount of money which Vodafone received for premium sms and similar services wasn't worth it - the calls we got about this issue were always very long and very difficult, and I know that we lost customers because of this. Now that I am no longer working at Vodafone and have a different job (in a different industry), and it's easier for me to candid about being uncomfortable with Vodafone's role (and all the other mobile carriers) in creating this problem. I agree that they aren't blameless and I am disappointed that they haven't done more from their end to prevent these abuses.

[Tee]

I have recently deleted my account on sms.ac but still received messages from them. I found that I couldn't contact them unless I had an account. I was so stupid and SIGNED UP AGAIN! After trying countless of times to get them to delete my old and new account and ALL of my information and stop sending stuff to me, I finally checked the Internet for help. THEN I found this site. I feel so frustrated and so STUPID! I have spent TONS of time trying to figure out how to stop this insanity and now, I will probably be DOUBLY charged since I have TWO account now! I am also living in Canada - there is no short codes for Canada to stop this service. I don't know what to do! Please help!!!

[Jeremy]

I've had similar problems with SMS.ac. I have emails on my system from them dating back to 2003 with FREE written all over them.

I totally disagree with the first comment on this post (from Faranaz Eskandary). If someone is going to be providing you a service charged to your mobile account, you should have to authorise it through your phone. A message should come up saying "A request has been made through SMS.ac to subscribe to a charged Premium SMS subscription service. Messages will be charged to your mobile account at $0.55 each, do you wish to accept?" and then the response mechanism should be foolproof ensuring no one can click "Yes" by mistake. Anything else is a scam and not just by SMS.ac, but also by the phone companies and intermediate SMS companies such as "5th Finger".

Telstra's customer service centres have given me the same run around as morgan describes, offering me no recourse to lodge a complaint. I eventually got fed up and lodged a complaint with TIO. Now they've referred me back to a department at Telstra which is more receptive to complaints, so I'll see what happens.

In the mean time, I'm still of the strong opinion that if it's a service you didn't request or initiate through your mobile service, then it shouldn't be billed to your mobile account! Full-stop.

Oh and I did contact SMS.ac customer service and received absolutely no response from them, not to mention that they list email addresses on their website that bounce. Though in my case their refund policy would be no use since it was a slow leak and I've been receiving messages over a number of months. However, it still adds up. Not to mention that I visited their website a number of times trying to figure out how to stop the messages, before I knew they were being charged. It's not until you go to their help topic on how to close your SMS.ac account that they reveal the secrets. So SMS.ac isn't exactly innocent.

[Jeremy]

Also found this article, which some may be interested in seeing:
http://www.nzherald.co.nz/index.cfm?ObjectID=5500251

The fact that Vodafone NZ was investigating the issue must suggest that mobile carriers must at least have some responsibility, though I'd love to know what the outcome was.

[Natalie Moseley]

My best-friend's computer was just infected with a worm and it sent out messages to everyone on her buddylist 5 times with a link attached (a duplication of the worm) Luckily she was standing next to me when I recieved the message and she told me not to click on the link because she hadn't sent it. This worm was generated by one of those "SMS" companies, and perpetuates itself. When I contacted my phone company they informed me that I was being charged $3.99 per message for the priveledge of getting a worm.

The issue with the SMS scam is that you are being charged for every message received, not every message sent. With SMS.AC the company "sends" messages from people that supposedly want to be your friends. These "people" do not exist and are automatically generated by the company to increase profits. They are inflating their profits.

Unfortunately, as I discovered today, I will be charged $20 for messages that I received via a worm and there is nothing I can do about it. Write to your congressperson and petition them to look into Privacy Act 74 and close the loophole. You should be charged for messages sent, not received, or have to click an agreement before authorizing any premium service.

[Lazy Fox]

Hy all,

I am quite shocked about premium services but also i've seen the perfect solution.
- The mobile service providers should only let you pay thru your phone only when you explicit set the option with them.

For sms ac i can only say this:
- it seems they cover their ass as good as possible
- on forums like this you'll always find people like "Chris McKibbin" who are claiming that it's not a scam but
- they use the weak side of people their trust to get their money

I also payed for services thru sms, and the first time i also did not see it when i subscribed while they writed it clear under the subscribtion form. So once i knew this i could also make a bussiness of this weakness in the system...

Then today 11/10/2005 i had a friend asking me a favour, to help her unsubscribe from SMS AC. She gave me her username and password and i logged in...

The first i looked for was a way to unsubscribe her but i did not find it, but i found a page where i could turn off options to receive SMS messages where she had to pay for. When submitting the form i always got an ERROR PAGE!!!!

http://www.sms.ac/unavailable.htm

I don't think it was an occasional error because my colleague at work told me that his girlfriend had the same problems a phew months ago!!!

- So they really make it difficult to unsubscribe

So it was not possible to unsubscribe or to turn off the options to receive SMS messages(where she had to pay for).

On one or another forum i found the way to unsubscribe, finally...

Now this was my opinion,...

[Philip Lee]

Stay away from SMS.ac which is a cheating evil for sure.

[Jake]

I despise premium SMS perpetrated by crooks like sms.ac.

Worse still, SMS scams are infiltrating TV networks here in Australia, the worst of which are mostly aired during programs that attract teen audiences.

An example of this would be the Simpsons, on Channel 10, which broadcasts two or three SMS quiz scam ads during EVERY commercial break.

Example:
"Win this 'bling bling' Apple IPOD! Answer this question and play to win : The IPOD plays a) MP3's or B) CD's".

Now, its more than obvious to EVERYONE that ipod's play mp3's, but they make the question incredibly easy so every teen will get suckered into SMS'ing the answer to them , charging you $5 per SMS sent AND receieved! To make matters worse, the "Quiz" is 10 questions long, which means if you actually DO complete it, the company bilks you out of $50!

And guess what? They are only giving away ONE frickin' Ipod to ONE person, meaning they make thousands and thousands of dollars at the drop of a hat.

[chris]

it isn't a scam if you read the fine print.

[robdog]

i was surfing thru the internet looking throught ringtones when i found one that applealed to me, so i put my numba in an got a free tone. this was done onn the web. sop afta a few days i didnt take any notice of this until i recharged. bout 6pm i reved another ringtone which cost me 3 dollars, this kept goin 4 4 days untill i run out off credit, then i was pised off. i couldnt find the internwet site again, so i called telstra an they said that they couldnt do anythin but they told me that it was sol mobile that was billing me an a numba so i cal the numba an get an automated answwering machine that said that they would unsubscribe me within 2 days. but it neva happened. and i still cant stop it. has this eva happened 2 any1 else, does any1 know how to stop it

[Markus]

For those riddled with SMS.ac, here's a page (1) detailing how you get opted in for premium services without your knowledge, and (2) telling how to cancel services and deactivate your account.

http://www.codewallah.com/scam/smsac/

[me]

I think offering a service as 'free' (sending sms messages) and then in the small print saying 'only for the first 30 days' isn't exactly honest business.

Lawsuits have been filed against the founder and the initial user base was founded fraudulantly.

Sounds like there is a lot of bad karma built up there.

[nick]

I worked at SMS.ac /SMS.AC and they send out fake messages to users. Every day 3 employees are designated to send out 24 messages each to the biggest user groups - resulting in these users getting charged for those messages.

They also have bots running constantly that create fake users.. how do you think they claim 35 million users.. you don't really think they have that many do you?

If anyone is considering a lawsuit against SMS.AC I will take oath and repeat what I just told you.

The CEO Michael Pousti has already been sued for what he did at CollegeClub another company he founded.. he sold the company and ran off with all the equity giving none to the employees who took equity for lower salary trade.

[Ruth]

I'm from the Netherlands and was also 'screwed' by sms.ac: never enrolled and it was almost impossible to get rid of it. I am a journalist and am writing an article about sms scams and spam. Would like to interview people who have worked there or still work there, you can reach me at the email address provided.

[UnhappyJan]

I've found out how to remove this supposedly after a lengthy chat with my mobile carrier. I said basically show me where I said I ok'd the charges via the mobile phone and contract I had with them and they offered a $2.00 credit for the month.

Well the "marketing promotions company" running this in Australia is 5th Finger. Quick Google and says they have been bought out by Ninemsn.com.au so the biggest is now a spammer?

Ring in Aus 02 8307 7830

[Richard Howard]

Hi Everyone,

Just to re-asure those who use Premium Rate Services there are very few Premium Rate SMS Providers who run fraudulent SMS campaigns, my telecoms business Phonenumbers4u being one of them. However if you are receiving unwanted Premium Rate Text Messages please text the word "STOP" to the originating shortcode immediatly as this should prevent further broadcasts.

And report this matter to Premium Rate Regulator ICSTIS or myself as I will personally support you with your claim.

Kind Regards
Richard Howard
www.Phonenumbers4u.co.uk

[Another Kiwi]

QUOTE
Just to re-asure those who use Premium Rate Services there are very few Premium Rate SMS Providers who run fraudulent SMS campaigns, my telecoms business Phonenumbers4u being one of them
UN-QUOTE

Well that's very big of you to admit that, but I think you may have actualy meant something different than it appears!
LOL

[salima]

I live in England and have been receiving stupid text message since 2003!

I just found out that it costs to receive them. I just cant beleive I fall in the trap so easily, ive never been so furious...

They owe me at leaast £200, maybe a lot more I dont realy know as Im a pay as you go customer I dont keep record of all my calls and charges.

Someone at customer service called me today to tell me they cant give me the refund I asked for. I told them I wanted to speak personally to their supervisor. Im waiting for their call today and belaive me I WILL GET MY REFUND BACK whatever happens otherwise im taking this case to the court.

[D. C.]

I filed a complaint with RipoffReports.com about being scammed by SMS.ac. RipoffReports replied back about how great SMS.ac's customer service was. HOGWASH! It wasn't long afterwards that my complaint on RipoffReports dissapeared. I later found out from a correspondence with "Ed" (the founder of RoffReports) that SMS.ac pays them for some sort of service. Ed didn't elaborate but scolded me for thinking bad about RipoffReports/SMS.ac's relationship. Yeah baby , it's all about the money!
I initially tried to get a refund through SMS.ac but have gotten nowhere with that route. They hide behind a deceptive TOS and use legal threats to bully many who have made complaints against them.

[Charles]

I had an interview over at SMS.ac on thursday and i must say that company seems like the biggest scam. All of your own ideas becomes SMS property and that company steals ideas left and right from their employees and customers. They are even stealing tons of ideas from Google and Microsoft. I researched them online, and all i can find is negative things about them.