Verizon Taking Aim at Premium SMS Fraud

This week Verizon Wireless filed suit in hopes of bringing to an end a reportedly fraudulent scheme perpetrated on wireless subscribers through premium SMS campaigns.

Verizon is asking the U.S. District Court of Arizona “to put an immediate stop to the activities.”

With help from Verizon in their own investigation, the Texas Attorney General also filed a similar suit Monday against the same defendants – Jason Hope and Wayne P. DeStefano, owners of companies Cylon, Jawa and EyeLevel Holdings.

“Texas Attorney General Greg Abbott has been a strong partner in shutting down this fraudulent activity,” says Steve Zipperstein, general counsel and vice president of legal and external affairs at Verizon Wireless. “Verizon Wireless also is suing Jason Hope and his associates and co-conspirators who established this intricate fraudulent enterprise. 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 claims the defendants defrauded Verizon Wireless by misappropriating approved short codes for unapproved “shadow” campaigns that did not comply with Verizon Wireless’ consumer protection and disclosure policies. “Verizon Wireless recently became aware of the possible fraud and immediately launched an investigation,” the company said in a prepared statement.

The lawsuit, according to Verizon, shows the defendants were “blocking certain IP addresses from accessing the websites associated with these shadow campaigns or were re-directing visitors to shell websites, preventing Verizon Wireless and its auditors from finding the shadow campaign websites in the normal course of monitoring Premium SMS campaigns for compliance.”

Customers who believe they have been affected by this scheme and think they are due a refund, Verizon says, can visit to learn how to submit a claim. The website provides full names of all the Premium SMS campaigns and associated short codes Verizon Wireless has been able to trace back to the defendants in the lawsuit. The campaign names would appear in the Data Charges section of detailed wireless bills; customers can use MyVerizon online to get detailed bills going back one year.