Verizon Suit Seeks To Squash SMS Scammers

Verizon this week filed a suit in federal district court in Phoenix in its crusade against an ongoing scheme that uses premium SMS, or text message, campaigns to defraud the carrier and its customers.

Going after SMS fraudsters comes as mobile device scams and security threats continue to grow in frequency and severity. SMS fraud, through which companies set up Web sites to rope in unwitting customers to fraudulent premium third-party SMS text messaging services, is just one of many persistent mobile threats and can be used to accrue massive amounts of money.

The suit filed by Verizon names Jason Hope and Wayne P. DeStefano and companies they own, including Cylon, Jawa and EyeLevel Holdings among others, and asks for an immediate injunction to stop these companies from further defrauding Verizon Wireless and its customers as well as monetary relief.

In the lawsuit, Verizon alleges that Web sites run by Hope and DeStefano promised customers recipes, video game tips and other content sent daily via text messages, but did not properly disclose the cost of the service. Essentially, customers were bilked into paying exorbitant text messaging fees.

According to Verizon, the Texas Attorney General also filed a similar lawsuit against the same defendants.

"Texas Attorney General Greg Abbott has been a strong partner in shutting down this fraudulent activity. Verizon Wireless also is suing Jason Hope and his associates and co-conspirators who established this intricate fraudulent enterprise," Steve Zipperstein, general counsel and vice president of legal and external affairs, Verizon Wireless, said in a statement. "As our work in the judicial system continues, I urge our competitors to quickly follow and put a stop to this fraud and ensure all mobile customers are protected."

Verizon said it discovered that the defendants named in the suit defrauded Verizon Wireless by misappropriating approved short codes for unapproved "shadow" campaigns that don't comply with Verizon customer protection or disclosure policies.

The SMS fraud lawsuit also alleges the defendants were blocking certain IP addresses from accessing the Web sites associated with these shadow campaigns or were re-directing visitors to shell Web sites, which prevented Verizon and its auditors for finding the sites.

The lawsuit is the most recent in a string of several Verizon Wireless has filed since 2004 to thwart wireless spammers, telemarketers and pretexters.

Verizon Wireless are urging customers who think they were affected to file a claim and seek a refund.