[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.