The truth regarding SMS services money

Many South African’s have lost money after their SIMs were billed without authorisation by rogue wireless access service providers (WASPs). This can easily be prevented by a double opt-in SMS system – so why is Vodacom the only operator which has this system?

Currently a rogue WASP can start billing a SIM card from Cell C and MTN without the authorization of the subscriber. All they need to do this is the person’s cellular number.

Vodacom’s subscribers, in contrast, are protected against unauthorised SIM billing thanks to its double opt-in system.

Vodacom introduced double opt-in (aka MESH) in December 2011, which requires subscribers to confirm, via SMS, that they want to subscribe to a paid-for SMS service before they are billed for it.

After Vodacom introduced double opt-in they have not had any new cases of fraudulent billing of WASP services. This clearly shows how effective double opt-in is.

Why not launch double opt-in?

A double opt-in system is clearly very effective against fraudulent SIM billing, so why don’t MTN and Cell C follow Vodacom’s example in implementing this system?

According to two industry experts, who asked to remain anonymous, it is all about the money.

Vodacom said that they saw a total reduction of over 33% in WASP revenue after they introduced their double opt-in system. Despite the lost revenue, Vodacom said it was worth it.

“When the double opt-in business rules were launched we saw a 30% reduction in WASP billing queries and when we implemented the double opt-in technical solution there was an additional 60% reduction,” said Vodacom spokesperson Nomsa Thusi.

“Clearly the double opt-in service has provided major benefits for our customers,” said Thusi.

Double opt-in is therefore a great way to protect subscribers against unauthorised SIM billing, and assist them to only pay for the SMS services they want.

MyBroadband asked MTN and Cell C why they have not yet implemented a double opt-in system. Here is the outcome:

• MTN: No comment
• Cell C: No comment

The Wireless Application Service Providers’ Association (WASPA), tasked to protect consumers against “bad practices”, said that it is actively working with MTN, Cell C and Telkom Mobile to follow Vodacom’s example.

“MTN, Cell C and Telkom Mobile are all currently working on their own versions of the independent opt in system [hence double opt-in] and we are hoping that these will all be operational in the next 12 months,” WASPA said.

More about WASPs and double opt-in

Your airtime stolen, and all you can do is complain

Massive fight to get R7-a-day money back

Vodacom launches double opt-in system for WASPs

A nail in the coffin of rogue WASPs