Ringtones and Complaints in the US

[El Gringo]

http://www.cbsnews.com/stories/2008/...=mostpop_story
Ringing Up Big Charges For "Free" Tones
Charges For Unordered, Unwanted Services Popping Up On Cell Phone Bills — And They Can Be Tough To Stop
Feb. 22, 2008

(CBS) Every kid wants a special ring tone.

"What's wrong with the ringtones that come with the phone?" CBS News investigative correspondent Sharyl Attkisson asked teenager Kelsi Dolan.

"They're Beethoven!" Kelsi said.

So imagine Kelsi Dolan's excitement when she got a text message on her brand new phone.

"It said, 'you've qualified for a free ringtone,' and they sent it to me three times," Kelsi said. "So I asked my Mom if I could get it and she said 'no.' So I texted 'no' back."

But saying "no" wasn't enough. A charge for $19.99 showed up on her phone bill. When her mom tried to get it removed, her phone company told her it was a monthly subscription and it couldn't be stopped.

"I didn't even want a refund for the first month because I figured, 'okay, ya got me.'" Debbie Dolan, Kelsi's mother, said. "Fine I'll take the $20 hit. But when you're gonna keep doing it and you won't do anything to stop it?!"

It's called "cramming," Attkisson reports: Charges for services you didn't order and don't want that can be next to impossible to stop.

And it's not just happening to kids. Last year, the FCC ordered millions of dollars returned to angry cell phone customers who said they were scammed.

Rebecca Anderson did nothing more than search the Web for free ringtones. Then she, too, got hit by monthly charges.

"I did not agree to any charges. I did not download anything," Anderson said.

An innocuous-looking website run by a company called Ringaza. Peel away the layers of Ringaza and you find a man named Scott Richter, better known to some as "the King of Spam."

A few years ago, Richter was one of the biggest e-mail spammers in the world. He even paid a $7 million settlement over it. And now he's in the ringtone business. He didn't respond to our repeated interview requests.

But carriers like Ringaza owe some of their success to carriers like Verizon Wireless ... which agree to add the charges to your regular phone bill.

"If you believe that you've been charged in error or that you didn't subscribe, we'll credit that charge," said Verizon Wireless spokesman John Johnson.

Johnson says if you suspect fraud, all you have to do is call. But it's not always that easy.

"Verizon said that this was an outside carrier and they were not responsible for these charges," Anderson said.

And in Dolan's case: "They told me they wouldn't take it off and they couldn't stop it."

the UK model

[Hamlet]

very strange...
whois ringaza

addresses 128.121.39.71

(privacy protected: Moergestel, 5066 ZH, NL [???])
-->
http://whois.webhosting.info/128.121.39.71

-->
1 CHRISTIANMOBILEUSA.COM.
2 GLOBALTXT.NET.
3 WIZRA.COM.

whois wizra.com?

Registrant:
Operatelecomusa
12310 Pinecrest Rd. Suite 304
Reston, Va 20191
US

Domain name: WIZRA.COM

= Opera Telecom Inc. = Colin Matthews (CEO of Opera Telecom Inc in Reston, according to SoS files)
???

the UK model

Originally Posted by El Gringo

?????????????


whois globaltxt.net

Registrant Contact:
Globaltxt
Aaron W* (*ww@hotmail.com) [you may find one at facebook and one formerly with RTE Interactive, Irish TV][edit: he is the one from facebook, using the same mail: here]
+353.8626071**
Fax: +353.
47 Heather Court
Stepaside Park
Dublin, Dublin D18
IE

US-googlegroups
http://groups.google.com/group/news....8aa13ea7bc6c5c

here is the man
http://www.spamdailynews.com/publish...doing_well.asp

[El Gringo]

so
ringaza is 'our' Opera Telecom
http://ringaza.thequizclub.com/
http://www.ringaza.com/

do you think Gary did a 'due diligence' check on Richter

EDIT
http://www.youtube.com/watch?v=FVfIKsummxo

[Hamlet]

But what is that strange ringaza whois?

Why are they using privacyprotect.org and who is that?
Their clients have nice google references


And - that's the way "chaos investigation" goes - just a few hours after I have checked the ringaza whois I have found the same whois protection service which I didn't recognize before, when I was doing an investigation of one of the ugliest networks I know (I wouldn't even dare to mention that I'm investigating...). I asked my archives about them and found

Privacyprotect.org
Domain Admin (contact@privacyprotect.org)
PO Box 83-000
Johnsonville
Wellington
null,6440
NZ
Tel. +45.36946676

Ok, but let's go back to ringaza.com and its IP range:

In the same IP range you can find
128.121.39.83 = post1.otcus.com
whois?

Domain name: OTCUS.COM
Administrative Contact:
RoleAccount, Operatelecomusa techstaff@operatelecomusa.com

a few days ago (Googlecache)

Opera seems to be... deep into it. Pheeeeew! Nice story, friend

[El Gringo]

http://www.prwebdirect.com/releases/...rweb337631.php
CPAEmpire.com Re-launches RingAZA – Free Ringtones and Horoscopes for Cell Phones

Domain Name: CPAEMPIRE.COM

Registrant:
PrivacyProtect.org
Domain Admin ()
P.O. Box 97
All Postal Mails Rejected, visit Privacyprotect.org
Moergestel
null,5066 ZH
NL
Tel. +45.36946676

http://www.prwebdirect.com/releases/...rweb386038.php
OptinRealBig.com, LLC Announces Plans to Expand its Physical Presence in the United States and United Kingdom

Westminster, CO (PRWEB via PRWebDirect) May 15, 2006 -- OptinRealBig.com, LLC, (“Optin”) an industry leader in online direct marketing today announced plans to expand its physical presence in the United States and United Kingdom.

Scott Richter, CEO of Optin stated, “Our plans to open strategic offices in the East Coast and UK markets in the near future represent an important milestone for Optin. The planned expansion not only facilitates the record-breaking growth trends we have been experiencing this year, but also allows us to cultivate and actively promote our new business units.”

“Our expansion demonstrates Optin’s continued commitment to providing superior support to our Affiliates and Advertisers on a global scale, in an intelligent and cost-effective manner,” said Steven Richter, President of OptinRealBig.com, LLC. He also stated that, "Optin continues to seek out additional tactical partnerships in global markets and we believe that our physical presence in these markets will expedite our goals.

Steven Richter added that, “Our internal growth coupled with our expansion plans, furthers our mission to find qualified industry veterans to join our dynamic team. We are currently looking for the best and the brightest people this industry has to offer.”

OptinRealBig.com, LLC -- an industry leader in online direct-marketing, delivers full-service, results-oriented solutions. Since 2001, our mission has been simple: to generate the best sales results possible for our Advertisers while providing our Affiliates with a one-stop solution that maximizes earnings on their traffic. CPAEmpire.com, a division of OptinRealBig.com, LLC, is one of the fastest-growing Affiliate Networks, providing its affiliates the highest payouts in the industry. Additionaly affiliate benefits include weekly payments, if qualified, and the Thank You Affiliates(sm) Rewards program allowing their affiliates to earn Visa Gift Cards based on productivity.

DataOverdrive.com, a division of OptinRealBig.com, LLC, offers List Management Solutions helping clients convert their current lists into a supplemental profit center. For more information, visit http://www.cpaempire.com or http://www.dataoverdrive.com.

Contact:
Missy Ward
407-786-9028

http://www.ringaza.com/
boltblue ?

[El Gringo]

http://www.oitg.com/index.cfm?PageID=197

Mobile Content Services

Content services are supplied by Opera Interactive sister company – Melodi Media. Melodi produce the vast majority of content in-house (including custom production) audio content is produced by in-house musicians for 14 countries weekly. Content extends to video production, games and entertainment products.

Melodi also have an in-house Web and WAP development team for production of custom services.

Clients
FHM
Heat
Talk Sport Radio
Orange
Vodafone
News 24 Group
Xing
Ringaza

.

[El Gringo]

http://www.cbsnews.com/stories/2008/...n3892070.shtml
AT&T Settles Cell Phone Scam Suit
Feb. 29, 2008

(CBS/AP) AT&T Mobility, the nation's largest cell phone carrier, has agreed to pay thousands of Florida consumers who were billed for third-party services such as ringtones and text messaging that were advertised as free.

The settlement announced Friday between Florida Attorney General Bill McCollum and AT&T Mobility could result in refunds of more than $10 million in all, depending on how many consumers seek compensation

McCollum said the main culprits are third-party companies that advertise ringtones and other services on the Internet, often promising that the service will be free. When customers - often teenagers - sign up, they or their parents are then surprised to find charges on their wireless bill.

"They will download this thinking it's free because the advertising on the Internet says it's free," McCollum said. And when the charge shows up on the bill, it's not always clear what it is, either, he added.

"This advertising is wrong, it's deceptive ... and it's all over the Internet," he said.
[................]

i assuming all the other US mobile operators will be doing the same

http://www.cbsnews.com/blogs/2008/02...y3894579.shtml
Rring…rrrring. Gotcha!
February 29, 2008

In four short years, the ringtone industry has emerged from nowhere and has become a billion-dollar market. And just as fast, scam artists found a way to tap into the line. That's what's behind a major settlement of a fraud investigation announced today by Florida attorney general Bill McCollum, and it will impact cell phone customers nationwide.

Here's how it works: customers are charged for ringtones, wallpaper, joke-of-the-day, you-name-it on their cell phone bills ... charges they never authorized and services they don't want. The charges aren't properly identified on the bill as to what they are or where they came from.

If a customer does study his bill closely enough to catch the bogus fee and call the phone company to inquire, too often he's told that he "must" have subscribed to the service, that the charges are monthly and will go on indefinitely, and there's really no way to stop it. This has happened to an estimated untold millions nationwide.

When investigators from Florida's Attorney General office began probing into thousands of complaints filed in that state, they followed the ringtone money trail and discovered it led all the way to the major cell phone companies such as AT&T and Verizon, which are profiting in the alleged schemes to the tune of up to 45 percent of the bogus charges. And that probably explains why so many customers say their phone company made it difficult or impossible to wipe the charges off their bills. Here's what the attorney general's office learned about how it all works.

You search for "free ringtones" through Google or similar search engines.

The search results include sites that advertise ringtones that are "100 percent free," "complimentary," etc. … with no disclaimers.

You click on the site and maybe are prompted to click onto other sites. Eventually, you are asked for your cell phone number so you can be sent the "free" ringtones.

Typing in the number unwittingly "subscribes" you to a monthly service that's next to impossible to stop. You don't know it unless you study your next phone bill and, even then, it's hard to identify because it's not labeled as to what it is.

Peeling back the layers of who's involved and how much money they make reveals a complex Web of participants. Here's a simplified version:

# There's an advertiser who puts the ads on the Internet and convinces you, using deceptive practices, to type in your cell phone number.

# Once they have your number, they give it to the ringtone provider which pays $12-$18 for the "lead."

# The ringtone provider subscribes you to a "service," (new ringtones every month, etc.) usually charging $9.99-$19.99 a month.

# The ringtone provider sends the information to a billing "aggregator," which tells the phone company, such as AT&T, to put the charge on your phone bill.

# The phone company, the billing aggregator and the ringtone company split the profits.

# The longer they can keep the charges on your phone bill, the money they make.

In the settlement announced today, AT&T Wireless (formerly Cingular) has agreed to change ITS billing practices nationwide. Those obscure charges will now be clearly labeled on your cell phone bill. If you call to complain, the charges will be removed. The company will also police and be responsible for misrepresentations in those Internet ads promising "free" ringtones. And in Florida, where the case originated, AT&T will refund customers who believe they've been cheated over the past three years. The Attorney General says that could amount to somewhere between $10 million and $45 million. That's just in Florida!

Why haven't the FTC and FCC taken very public steps to stop all this? It's hard to say.

But without aggressive action on the part of federal agencies, Florida's Attorney General stepped in and took the reins.

AT&T isn't the only company that's gotten in trouble. According to investigators, the other major cell phone companies, ringtone providers and their advertisers use strikingly similar tactics. As one observer put it: it's as if they've all gotten together at a ringtone convention to share the tactics of the scheme. That's why the Florida Attorney General also announced today that investigations are beginning into Verizon, Sprint/Nextel, Alltell and T-Mobile. Look for those companies to quickly try to get the monkey off their back by making quick settlements and agreeing to follow AT&T's lead in changing their ways. For customers: it's all good. As far as restitution if you live outside of Florida or are using a company other than AT&T: try filing a complaint with not only your phone company but also the FCC online at fcc.gov.

Because of the very nature of the scheme, investigators say you may not even realize you've been cheated. Here are some of the ways those unuathorized charges may have been labeled, disguising what they really are:
# "Direct Bill Charges""
# "3rd Party Downloadable Content"
# "Premium SMS Messages"
# "Premium Text Messages"
# "M-Qube"
# "M-blox"

So check your bill. Maybe they got you.

But now, they're on the other end of the line ... and it's the Florida Attorney General who's calling.

UK US EU AU NZ ...etc,etc the same questions

[El Gringo]

this is interesting

http://myfloridalegal.com/newsrel.ns...2573FE004E6338
February 29, 2008
McCollum Retrieves Millions For Florida AT&T Wireless Customers Billed for "Free" Ringtones

~ National model for advertising integrity obtained through CyberFraud Task Force settlement ~
[.................]
The agreement with AT&T Mobility, formerly known as Cingular Wireless, allows customers to seek refunds even if they are no longer AT&T or Cingular customers. The company has also agreed to enhance its customer complaint resolution process and, upon request, will terminate a customer’s enrollment in any recurring membership program and will issue full credits and refunds without referring the customer to a third party for such resolution. The task force intends to use the AT&T Mobility agreement as a model as it continues its investigation of the industry.

but we can only dream

http://www2.tbo.com/content/2008/mar...-new-policies/
Ring Tone Settlement May Signal New Policies
Updated: 03/01/2008

TALLAHASSEE - Accused of billing customers for ring tone services that were supposed to be free, AT&T Mobility, the nation's largest cell phone carrier, has agreed to refund more than $10 million to thousands of Florida consumers.

State Attorney General Bill McCollum said Friday that his office is pursuing similar settlements with other wireless providers, including Verizon, Sprint, Alltel and T-Mobile.

"We have not entered negotiations with them yet, but we will," McCollum said. "We will be asking them to do exactly what is being done by AT&T Mobility."

Advertised as a free service on the Internet, ring tones are often downloaded by teenagers. But a closer look at the fine print reveals charges ranging from $9.99 to $49.99 a month, McCollum said.

"They will download this thinking it's free, because the advertising that's on the Internet often says it's free," he said. "In many ways, it's fraudulent because it advertises this as free when it's not."

When the bill arrives, it's not always clear what the charge is for. In many cases, it's listed simply as a third-party charge.

Under the settlement, AT&T Mobility agreed to police third-party advertisers to make sure consumers are no longer misled. The company also agreed to make billing more transparent.

"It's going to say ring tones, and it's going to give them the opportunity to cancel," McCollum said.

Atlanta-based AT&T Mobility said it wasn't responsible for the deceptive advertising.

"This is not content that was offered or sold by AT&T," said company spokesman Marty Richter. "The agreement is voluntary. We've been in compliance with most of the stuff that's in this agreement for some time."

AT&T Mobility is the first cell phone company to provide such refunds and adopt strict standards for third-party advertisers. The company said it has taken steps to protect customers from misleading ads and billing statements.

"We are proud to lead the industry with this cooperative agreement to make sure our customers are only billed for services they agree to," Richter said.

Refund notices will be sent to AT&T customers during the next few weeks. The total refund will range from $10 million to $45 million, depending on the number of customers who claim they were wrongly billed.

"Because it's a rebate system, I suspect it will be closer to the $10 million figure," McCollum said.

Terms of the settlement also require AT&T Mobility to pay $2.5 million to the state to fight Internet fraud. The company will spend an additional $500,000 to teach consumers how to avoid being duped while surfing the Internet.

About 40 percent of the ring tone charges went to AT&T Mobility, McCollum said.

"They make a profit on all of that which is sold over the Internet," he said. "That's why they have agreed to do this."

Brad Ashwell, spokesman for the Florida Public Interest Research Group, a consumer advocacy organization, praised McCollum and his team of investigators for holding the nation's telecom giants accountable and warned consumers to be wary when using the Internet. While the Internet has created opportunities for bona fide entrepreneurs, it has also given criminals another tool to cheat unwitting consumers, he said.

"The digital marketplace is sort of a Wild West right now," Ashwell said.

[Hamlet]

Have you seen the links in the "General Attorney" publication?

http://myfloridalegal.com/newsrel.ns...2573FE004E6338

Examples of the misleading internet advertisements are available here, here and here.

if you take this one: "Ringtoneviva"
http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7CAJAQ/$file/Get-Your-Ringtone.com.pdf

To cancel your plan, send a text "STOP" to 86595 at anytime. In case of questions please contact customer service at
care@ringtoneviva.com or call 1877 661 1136

Domain name: ringtoneviva.com
Registrant Contact:
FUNMOBILE
CKLY H (chris@funm*bile.com)
852 27823222
PO Box 1718, Shatin Central Post Office
KLN, KLN HKG
HK

Guess who he is? Guess who he comes from?

I'm half chinese and half danish. I speak danish, cantonese, french and english

see:
http://www.webservertalk.com/message109931.html

Or to make a long story short:

Christian H*
Bakkeledet 7
3460 Birkerød
DANMARK

This is only 2 miles away from "IBC International", run by Danish people and their Hong Kong friends
http://maps.google.de/maps?saddr=Dat...5&ie=UTF8&z=14

Another danmark-HK-connection? Surprised???

[Hamlet]

The other examples of the Florida General Attorney are also very funny. One of them ( http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7CAJ9U/$file/AdvertisersRewardNetwork.pdf )
looks exactly like this:

which is taken from
http://www.secinfo.com/d12TC3.u2Z95.htm
NEW MOTION INC, a company from Irvina (CA) registered in Delaware.
Mr Katz may be in need for answers to the investors. Or not.
Did he promise profits from action the General Attorney in Florida calls deception?

February 29, 2008 - a good day for Mr Katz to explain why NEW MOTION INC has changed its name to ATRINSIC
http://www.moconews.net/entry/419-in...-ceo-atrinsic/

So he thinks that class action suites against the old name will be forgotten?

[Hamlet]

So he thinks that class action suites against the old name will be forgotten?

Originally Posted by Hamlet

misunderstanding! There is NO class action suit

[El Gringo]

http://classactionconnect.com/cell_p...ox-complaints/
http://classactionconnect.com/cell_p...be-complaints/
http://classactionconnect.com/cell_p...ile-inc-63232/

the US cell phone operators are being allowed to tell their customers the same rudbbish

[El Gringo]

misunderstanding! There is NO class action suit

Originally Posted by Hamlet

you were right Hamlet, but I found this

http://www.rcrnews.com/apps/pbcs.dll...164132956/1012
Alltel, content vendors nailed with class action over billing
April 17, 2008

A class-action lawsuit filed against Alltel Corp. accuses the regional mobile-phone carrier of adding unauthorized charges on subscribers’ monthly bills.

The suit focuses on the relationships between Alltel and third-party mobile content providers and billing aggregators such as m-Qube Inc., a unit of VeriSign Inc.

“Alltel has for years been systematically, repeatedly and without authorization, billing its customers for purchases and services not agreed to by those customers,” the suit states. “Alltel and third-party service providers have, on information and belief, profited significantly through this practice.”

Alltel filed to transfer the suit from Illinois state court to federal court in Chicago, an action Alltel spokesman Andrew Moreau said “is a normal and customary part of the defense process.” Moreau declined to respond to specific allegations in the suit.

“Alltel’s decision to continue to charge its customers for mobile content without taking steps to authenticate the representations of the mobile content providers that the customer’s authority to be charged was obtained constitutes a deliberate and willful scheme to cheat large numbers of people out of small amounts of money,” the plaintiff stated.

The issue is not a new one. Indeed, content companies including Jamster and Buongiorno S.p.A. have been embroiled in similar litigation.

[El Gringo]

http://www.topix.com/forum/law/T4TDGFRU6AOINTTVV

http://www.forbes.com/investmentnews...d.html....when
SpongeBob On Your Phone
Nikhil Hutheesing, Forbes Wireless Stock Watch 02.10.06, 6:00 AM ET

New York -

Here's a company that's on the cusp of a fast-growing business, is increasing its revenue at an astronomical rate and will probably go public in 2006. It's Watertown, Mass.-based m-Qube, which was founded in 2001 and is just now coming out of stealth mode. It's unlikely that you have heard about this company before (there is practically nothing written about m-Qube), but it's very likely that you will be hearing much more about it in the years to come.

The reason: Big companies want to get their content onto your cell phone. Procter & Gamble (nyse: PG - news - people ), Viacom (nyse: VIAB - news - people ), Warner Music Group (nyse: WMG - news - people ), Sony Pictures and even Major League Baseball are all turning to m-Qube

Until now, that task was more grueling than it sounds. The reason: For content providers, going directly to the wireless carriers to be featured on their networks has not been a very successful approach. The main reason is that carriers have little space available on a cell phone's "deck," or the area where content is offered. Also, initially, carriers wanted to develop and own the content on their networks--not share it with others.
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Even after the carriers realized that consumers wanted content from shows like Dora the Explorer and SpongeBob SquarePants on their phones, making the content easily accessible over the wireless-carriers' networks wasn't an easy task. Content providers, such as Nickelodeon, would have to figure out how to make their content accessible over dozens of operators' networks based on different technologies that are accessed by hundreds of millions of subscribers using hundreds of different kinds of phones. It was a logistics nightmare.

But m-Qube solved the problem. Under its chief executive, Jeffrey Glass, the company developed a distribution system that integrates into the wireless networks of service providers. M-Qube now has direct connections with more than two-dozen wireless partners, including Verizon Wireless, Cingular Wireless, Sprint Communications (nyse: S - news - people ), T-Mobile, Alltel (nyse: AYZ - news - people ), Cincinnati Bell Wireless and Rogers Wireless, reaching more than 200 million subscribers throughout North America. At the same time, m-Qube's system takes care of billing and revenue share between the carrier, m-Qube and the content provider, and handles customer service as well.

All this has put m-Qube in a coveted position. Let's face it; m-Qube's access to carriers' networks isn't something that carriers freely give away. While there are others competing here--companies such as Mobile 365 and Mobliss (which was acquired by Japan's Index Corporation)--none offer a system as complete as m-Qube's.

The result is that m-Qube has become a one-stop shop for carriers and content companies. It has carved out a role for itself as a very critical middleman. Through m-Qube's service, you now can download a ring tone from Green Day or a Reuters news brief. You can access the Sesame Street Network, which is developing ring tones, or music from hip-hop group Public Enemy, which makes its songs downloadable to your phone. You can even get comic strips from GoComics.

Nickelodeon launched its Nick Mobile portal in October. The portal looks and feels like Nickelodeon.com, but it's managed by m-Qube. Here, you can download ring tones, wallpaper, text-messaging services and content from SpongeBob, Dora, Jimmy Neutron and The Fairly Odd Parents. When a mobile user tries to access Nickelodeon through his service provider (say Verizon), the request is sent to m-Qube, along with detailed information about the network and the kind of handset that will be used. M-Qube then "maps" the content for the user's particular phone while triggering the transaction through Verizon's network, billing the consumer and even getting its share of the revenue for the transaction.
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M-Qube was founded just four years ago by General Catalyst, a Cambridge, Mass.-based venture capital firm. General Catalyst recruited Jeffrey Glass to build the business. Glass had plenty of experience: A graduate of Harvard Business School, he had most recently been the founder and president of Transactive Solutions, a database-marketing company that was sold to Bookspan, a joint venture of Bertelsmann and AOLTime Warner (nyse: TWX - news - people ).

Glass, recently named to Boston Business Journal's "40 Under 40" list, made his first objective development of technology that would allow advertisers to communicate better with mobile consumers. By using m-Qube's technology, advertisers would be able to deliver time-sensitive, targeted-marketing campaigns to any wireless device.

But even that was a tall order. Keep in mind that back then, people weren't even using their phones to send text messages to one another. "We believed in the vision," says Glass. "We knew it was a 'when,' not an 'if.' " Glass hired a staff of engineers, invested heavily in infrastructure, such as building data centers, and by 2003, his team developed the wireless industry's first cross-carrier common short code, a method that allows you to type a five-digit code into your phone and get back content. That led to the industry's first application, which turned out to be a wireless promotion for Procter & Gamble.

All this was done with the expectation that, one day, third-generation networks would be deployed. Now that those networks are finally here, m-Qube's business is flourishing, and advertisers and content providers are turning to the company in order to nicely funnel their content onto your mobile phone. According to Glass, at the beginning of 2005, m-Qube was generating tens of thousands of transaction. Now, a year later, the company is registering hundreds of millions of transactions and processing hundreds of millions of dollars in transactions over its platform.

The result is that m-Qube has emerged as a fast-growing venture-backed technology company, and it has become a leader in the mobile-content space. Since 2003, the company has grown in size from 23 employees to over 190. M-Qube charges its content partners some upfront fees, including an ongoing maintenance fee for hosting the content, but revenue is primarily generated through transactions.
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Every time a consumer buys something, it gets billed to his or her cell phone. The carrier collects it, keeps about 30% to 40% of the proceeds and sends the rest to m-Qube, which then shares a percentage of the balance with the content provider. While m-Qube won't disclose actual sales figures, Glass says its revenue grew 1,300% in 2005 over 2004.

Venture capitalists have also been pouring money into m-Qube. In August 2005, m-Qube raised $10 million in venture-capital funding from an impressive group of venture capitalists, including Boston's HarbourVest Partners, GlobeSpan Capital Partners, Liberty Associated Partners and Bain Capital Ventures. That came less than a year after an earlier venture-capital investment of $17.5 million. Altogether, the company has received $42.5 million in venture capital. Glass says about half of that amount is in the bank, and that the company will become profitable in 2006.

Is a public offering in the works? Recently, m-Qube brought in senior executives with public-market experience, finished deploying a new financial infrastructure for reporting and forecasting, and is making sure it is compliant with Sarbanes-Oxley for things like investor relations, legal and human resources. So yes, it looks very likely that an IPO is in the works. If an IPO happens later, I'll certainly be on top of it.

.

[El Gringo]

http://www.kansascity.com/business/story/613545.html
May. 09, 2008
Suit alleges Sprint Nextel charged customers for unauthorized content

Sprint Nextel Corp. is the latest wireless carrier to be hit with a lawsuit alleging it charged customers for unauthorized “mobile content,” including ringtones, sports scores and weather reports.

The would-be class action, originally filed last month in Lyon County, Kan., by California resident James Peetz, was moved to federal court Thursday by Sprint.

The case is one of several dozen similar class-actions filed across the country against the nation’s largest wireless carriers. The Florida attorney general recently settled one such case with AT&T Mobility, formerly known as Cingular.

“It really is the Wild West out there,” said the lead attorney in the Kansas case, Jay Edelson of KamberEdelson in Chicago. “You’ve got thousands of very small companies who sell mobile content, and if they have your cell phone number they can start charging you.”

Sprint spokesman Matt Sullivan said that Sprint adhered to the guidelines created by the Mobile Marketing Association, which calls for content providers to obtain approval from subscribers before they send text messages and other content.

Typically, mobile content is offered for a monthly fee. Third parties, known as aggregators, deliver the content to subscribers’ phones. Carriers like Sprint then add the charge to the subscribers’ monthly bills.

The carrier keeps a portion of the proceeds and remits the rest to the aggregator, which takes a percentage and remits the balance to the mobile content provider.

The lawsuit says that Sprint has not adopted procedures requiring customer authorization before the charges are assessed. This “disastrous flaw,” the lawsuit alleges, “is an open secret within the industry, but little understood outside of it.”

“Armed with only a cell phone number, the mobile content provider can simply provide that number, along with an amount to be charged, to a billing aggregator (such as m-Qube or mBlox),” the suit states.

“The aggregator, in turn, instructs the relevant cellular carrier to add the charge to the bill associated with that cell phone number. The charge will then appear on the consumer’s cell phone bill, often with only minimal, cryptic identifying information.”

Peetz, the named plaintiff in the Kansas action, says he became a Sprint customer in 2000. In 2007, he said, he was charged for unsought “premium” text messages from Kepler & Associates LLC, doing business as JokeMobi, a third-party provider of mobile content.

Edelson said Sprint wasn’t directly responsible for the unauthorized charges. Rather, he said, Sprint was responsible for a system “that allows this to happen, and they have not been able to fix it to date.”

In its notice moving the case to federal court, Sprint said that, in a single quarter in 2007, the nation’s wireless carriers made more than $273 million off of premium mobile content. That translates into nearly $1.1 billion a year. Assuming Sprint’s share of that market equals its 23 percent share of the overall wireless market, its mobile content revenues last year would have totaled about $230 million.

Common mobile content services include customized ringtones, horoscopes, weather reports, sports scores and stock tips. More advanced content includes interactive radio and services that let cell phones function as credit cards.

In Florida, Attorney General Bill McCollum said thousands of AT&T Mobility customers in that state had unwittingly signed up for monthly subscriptions to third-party content, including horoscopes, wallpaper, text messaging and the like.

He said vendors used Internet advertising to focus on teens who, thinking the services were free, downloaded them to cell phones, not realizing that their parents would be charged.

In February, AT&T agreed to provide refunds to customers and more clearly explain the costs of the services. McCollum’s office said the settlement could total more than $10 million.

In September, the Minnesota attorney general filed a lawsuit alleging that Sprint misled consumers by imposing unauthorized charges. Among other things, the suit alleged that Sprint had extended wireless contracts without customers’ consent after they made minor changes to their service.

Edelson said about 30 would-be class-action lawsuits have been filed nationwide by consumers over unauthorized charges on their cell phone bills. He said several cases were nearing settlement, but he declined to provide details because the settlements were not finalized.

Sprint shares closed Friday at $9.38, up 40 cents.

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