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.
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