MyBroadband recently received complaints regarding the alleged unauthorised billing of SMSes by Wireless Application Service Providers (Wasps) selling ring tones, pictures or other offerings.
The situation was aggravated by the fact that some of the billing allegedly took place on re-issued SIM cards where the owners did not have any interaction with the service providers.
Some of the SIMs in questions were in fact used in point-of-sale terminals, telemetry devices and tracking devices where subscribing to such services is near impossible.
One industry expert, who wants to remain anonymous, said that the unauthorised billing of accounts, especially with re-issued SIM cards, occurs often.
“The problem is that there is nothing preventing Wasps from just billing a number out of the blue. There are rules and an industry watchdog Waspa (www.waspa.org.za), but the rules are generally not enforced,” he said.
“When a cellular user complains about being billed for content they never asked to receive, Wasps typically refund them (generally after a struggle) and the complaint goes away. Juicy profits are made because countless users never notice the subtraction of these small amounts, or simply don’t know how to go about complaining.”
He said that the problem was compounded through cellular number recycling. Cellular operators recycle numbers that have fallen into disuse, which means that new subscribers often buy a SIM where the previous user subscribed to services like ring tones or pictures.
A new subscriber then buys the recycled SIM card and loads airtime, but after a while the airtime suddenly disappears. The subscriber then phones Vodacom, MTN, Cell C or Virgin Mobile, but is usually directed to the relevant Wasp.
According to the industry source the Wasp will typically snub the subscriber and the consumer generally has no idea that they can complain to Waspa.
Waspa said it has taken several proactive steps to prevent abuse through malicious or negligent billing.
The Waspa code of conduct currently includes rules to automatically stop services for users who switch networks, automatically terminating users who have been dormant for three months, requiring monthly reminders for all subscription services and implementation of price threshold confirmations.
According to the industry source these rules, however, are not necessarily applied and he furnished MyBroadband with numerous numbers which were, according to the source, billed long after the three month inactivity period.
“Should a subscriber find any unauthorised Wasp charges on their bills, they should contact their mobile service provider to find out who is charging them for these services,” Waspa advised.
Waspa said that cellular users who had been incorrectly billed were very welcome to contact the organisation for assistance, as long as it is a Waspa member who was doing the billing.
If an independent adjudicator finds that a Wasp has been operating in breach of the Waspa code of conduct, the industry body can impose sanctions – such as fines – on the company concerned.
It is however not entirely clear what a consumer can do if the Wasp doing the billing is not a Waspa member.
Two of the Wasps fingered in alleged unauthorised billing, Buongiorno and Mira Networks, were asked for comment regarding this issue.
Buongiorno said that “it is the company’s policy to be completely transparent with regards to its charging plans and at all times ensures that it is acting in a responsible manner when it markets its business”.
Buongiorno further said that it adheres to Waspa guidelines and “only want customers who want to use our service.”
Mira Networks said that it is a pure aggregator, strictly offering business-to-business services. “We do not have any consumer facing products, so we don’t bill anyone. It is our clients who offer these services and bill the subscribers,” said Mira Networks.
Mira further said that the [cellular] networks recycle SIM cards that are inactive within three months – sometimes even earlier due to the shortages of numbers. “In cases of the recycled SIMs we do investigate those complaints in detail, we ask for proof of date of purchase and thereafter if we find that it is a recycled SIM we then provide with a refund.”
The cellular providers generate revenue from the wireless access service providers selling services and distributing it on their networks, raising the question as to whether they are doing enough to protect their subscribers.
MTN said that Wasps cannot phantom bill the customer as the billing transaction is initiated by the message sent by the user. MTN has further made it a mandatory requirement for the Wasp to allow the subscriber to double opt-in.
The cellular provider further said that a Wasp was not allowed to attempt to bill a customer after a billing failure 30 days later from the initial attempt to bill.
“In the case of monthly billed subscription services, after the initial lack of funds response from MTN, the Wasp will only be permitted to re-submit 24 hours after the first request. Should this re-submit get a lack of funds response from MTN, the Wasp will be allowed to re-submit the request 30 days later,” said MTN
“Should this last request receive a lack of funds response from MTN, the Wasp will be required to cancel the subscription services on the Wasp’s systems against the Service Users’ MSISDN.”
MTN said that it had the right to terminate the Wasp’s agreement or suspend it from using event-based billing if they are found in breach of these rules.
The current situation suggests that most of the protection of consumers is reactive rather than pro-active. A rogue Wasp seems to be able to engage in unauthorised billing and only stands to lose funds or be reined in in the event of a successful complaint by a subscriber.
All the numbers which were furnished to MyBroadband with apparent unauthorised billing were Vodacom SIMs – some of which were, according to an industry source, re-issued numbers.
Vodacom was asked to give feedback on what is being done by the company to protect its subscribers against unauthorised billing and how they ensure that re-issued SIM cards are ‘clean’, but the company did not give official feedback regarding this matter.
Vodacom was also asked to investigate the some of the SIMs in question and whether unauthorised billing took place, but again the company did not provide any official feedback.