Subscribers lose millions for unsolicited SMS

by Jaqueline P'ng

"RM0.0 Get unlimited ringtones FREE. Send <ON_TONE> to 36600 to activate now!"

Most people have received SMS like these from unidentified 5 digit number short code, starting with 6 or 3.

It was not until bills were unusually high that Krishnah Singh,70, decided to take a closer look.  To his surprise, there are 16 items labeled as such “services”, adding up to RM75.10.

He has been receiving small amount of spam SMS for a few months, but it only caught his attention when the message came once every 2 days.

"I usually delete the SMS right away, but I might have accidentally clicked on the link once."

Little did Krishna know, that click is equivalent to agreeing to pay for a subscription, costing RM5 per SMS.   

He demanded DiGi for a refund, but the phone service provider passes the buck to a third party-- the Mobile Content Provider (CP) before reluctantly facilitating the process.

Local CP outsourcing to Sub-CP

Content Providers (CP) are companies who sends out vast amount of SMS with content ranging from jokes, ringtones, horoscopes, wallpapers to 4D results, advertisement, bank notification and contest.

According to MCMC, as of October 2013, there are 533 licensed Mobile Content Providers in total, whereby 148 licensees are offering mobile content through messaging services.

Johary Mustapha, President of Malaysia Mobile Content Provider Association (MMCP) said that 50% of CP’s revenue are sneakily made from unsuspecting consumers.

"These consumers are mostly rural folks, children, elderly and those who are less tech-savvy, some CPs and Sub-CPs are violating ethical codes for profit."

Not all CPs create their own content, some are outsourced to a sub-CPs and practice revenue sharing model with them. Telco companies too, gets a slice of the pie for broadcasting the SMS.

For example, Telco company first collects RM20 subscription fee from a user, 50% of it will be paid to the CP. From there, CP will retain 20% of the revenue and 80% goes to the Sub-CP. But should a dispute arise and users ask for refund, CP will bare the full cost.

Officially registered CPs are Application Service Provider (ASP) license holder and are regulated by the Malaysian Communication and Multimedia Commission (MCMC). In contrary, the Sub CPs who don’t,  use CPs as a gateway or platform to disseminate content to its subscribers.  

Due to rampant complaints of unsolicited SMS, MCMC has many times, called upon CPs to implement self-regulation to their content.  

However, the reality is far from ideal. CPs simply cannot and are reluctant to weed out misbehaving Sub-CPs.

"We do ask for Sub-CP’s business profile before working with them, but they behave otherwise after we accept them. There are simply too many Sub-CPs to handle, it’s extremely tedious for us to scrutinize each one," said Johary.

Still, MCMC insist that CPs are responsible in monitoring their Sub-CPs and will only prosecute CPs who fail to do so.

Anyone can become a Sub-CPs as it does not require any operating license. They are usually based overseas and couldn’t be bothered about local laws and business culture.

"There are a lot of Sub-CPs from Africa, China and Europe, operating through local CP gateway. Malaysian authority has no jurisdiction over them, so it is difficult to regulate this part of the business."

Meanwhile, MCMC said in a written reply, 18 short codes has been suspended as of August this year. A total of RM595,000 in fines were also issued in 3 years to CPs who have breached their license conditions and failure to adhere to Mandatory Standard.

When asked of whether a blacklist exist to identify frequent offenders, Monitoring and Enforcement Division Head, Mr. Zulkarnain Mohd Yasin only revealed that a task force is in place to “discuss and address” matters related to mobile content service, and will continue to punish errant CPs.

Members of the taskforce includes Cellular Service Providers (Celcos), MMCP and Communications & Multimedia Consumer Forum of Malaysia.

Industry fear being scrutinize

Although the MMCP Association has been around for 7 years, it only managed to recruit 33 out of 140 local CPs to register as their member.

Connecting members of the industry and sharing information makes it hard for anyone to quietly accept contract from Sub-CPs with bad track records or cheat consumers. Many refuse to join the association because large portion of their revenue is at stake, he added.

"The more CPs are regulated, the lesser money they make," he explains.

Johary attempted to recruit more members by reaching out to Telco companies, but see little progress.

"I asked them (Telco) to make MMCP membership a prerequisite, before CPs can register their short codes with the Telco. But this will affect the Telco’s income from CPs as many are not are members yet."   

No Real Risk for Misbehavior

The only spam detection method for CPs and Telco is via consumer complaints. Telco and MCMC are able to cut off or suspend the short codes if it’s being abused.

Under the Communications and Multimedia Act 1998, any non-compliance with the Mandatory Standards may lead them to a penalty of up to RM100,000.00 or jail, or both.

Though MCMC has been compounding CPs for spamming and cheating offenses, none of them has ever got their ASP license revoked, said Johary.

“Suspension and compounding is like digging one hole to fill up another.”

When there is no risk of being put out of business, CPs can just rent another short code from Telco to replace the suspended one.

Whereas Sub-CPs that close down due to the suspension can still make a comeback, disguised under a new company name.

“I don’t want the industry to go haywire just like in Indonesia, consumer complaints flooded the government office and the authorities decided to shut down the entire CP business.” he noted.

He feels that the authorities should grant real regulatory power to the association to curb the problem more effectively and shoulder some of the authorities workload.

“Members of the association try to do clean business, but who are we to force others, including our own members, to heed our calls? We don’t even have the power to blacklist Sub-CPs.”

Responding to that, MCMC indirectly rejected the request saying :”As an association, they already have internal mechanisms to deal with errant CPs who are members on any non-compliances issues.”

Given the current situation, Johary opined that raising consumer awareness can help stop CPs and Sub-CPs raking in millions through unsolicited SMS.

“Don’t give your consent easily. If you’re not sure whether you subscribed to anything, send <STOP_ALL> to the 3 series short code, that’ll cancel whatever services you accidentally agreed upon. ”

Consumers should not stop at complaining to their Telco, but also make known to MCMC. Else, regulator would not take actions against the CPs.

He foresees a rise of mobile content related complaints as purchases via smartphones becomes more common.

What are the differences between 3 series and 6 series short code?

Mobile users fleeced by telcos over ‘dropped calls’

PETALING JAYA: Have you ever been in the midst of a call on your mobile and then the call suddenly disconnects for no apparent reason?

Thus, this necessitates you having to call the person back to resume the conversation.

This is what is known as “dropped calls”, something that seems to have become quite a norm in Malaysia.

It may not seem like such a big deal, right? After all, how hard is it to just hit the “redial” button on your phone to call the person back?

But you are actually being charged anew for your call again, said National Consumer Complaints Centre (NCCC) legal and dispute resolution manager Santhosh Kannan.

“For example, say a telco charges you 30 sen a minute for calls made. If you call someone and speak for 10 seconds before the call is suddenly cut off, and you call the person back, you are charged afresh 30 sen.

“This means that you are charged 30 sen for the 10 seconds and then you are charged afresh 30 sen a minute when you call the person back. Can you imagine how much telcos make from these dropped calls?” asked Santhosh.

Telcos have subscriber bases of millions and if they make just a few sen from each consumer from dropped calls, this would mean profiteering from providing shoddy services.

After all, if it’s just 30 or even 60 sen, most Malaysians would simply pay it without thinking twice or even thinking of lodging a complaint. However, if you multiply it by millions, telcos stand to make a comfortable profit.

In 2013, there were 8,626 complaints lodged with the NCCC on issues related to telcos, of which 1,783 were complaints on dropped calls.

But as Santhosh aptly pointed out, this may not actually reflect the actual situation when it comes to dropped calls.

“The actual number of consumers affected by this problem may be a lot larger as most people would not bother to complain about this, thinking it’s a small matter and not realising that they are being charged anew when they have to make the call again when it is cut off,” he said.

Santhosh wants the Malaysian Communications and Multimedia Commission (MCMC) to come up with key performance indicators (KPI) for telcos on the quality of their service.

“There should be a check and balance. MCMC should conduct service quality checks regularly to see if they are meeting their KPIs,” he said.

He said issues such as regular dropped calls would upset and irritate some consumers, who would then not pay their bill due to the quality of service provided, despite them having signed contracts with the telcos.

“This will then result in the consumer getting blacklisted by financial institutions, especially if they check with private credit reporting agencies,” said Santhosh.

In March last year, MCMC compounded three of the biggest telcos in the country to the tune of RM190,000 over dropped calls.

DiGi Telecommunications Sdn Bhd had a total of four compounds amounting to RM100,000, while Celcom Axiata Bhd was slapped with RM60,000 via three compounds and Maxis Mobile Services Sdn Bhd was served two compounds amounting to RM30,000.

The amount of the fines, said Santhosh, was negligible compared to the revenue these companies generate and thus would not serve as a deterrent to them.

Plus, dropped calls were still occurring as could be seen from the complaints lodged with NCCC throughout 2013, he added.

With Malaysia reported to have a 140 per cent mobile penetration, and with 47 per cent of Malaysians said to own more than one mobile phone, telco issues affect many consumers.

In fact, it is something affecting consumers the world over as mobile penetration increases with even schoolgoing children now having mobile phones.

This is why the theme for the World Consumer Rights Day (WCRD) on March 15 this year is “Fix our phone rights!”

Consumers International (CI), the world federation of consumer groups with over 240 member organisations in 120 countries, will commensurate WCRD with the launch of a new Consumer Agenda for Fair Mobile Services.

The CI website states that the agenda sets out the issues that most affect consumers, including the need for access to a reliable service, the security of their data and fair contracts and billing.

The agenda will be submitted to the World Telecommunications Development Conference, held by the International Telecommunications Union, where CI will call on phone regulators and companies to take action to stop these issues from undermining the success of this technology.

Closer to home though, MCMC should seriously look into the complaints on this matter lodged with NCCC and take heed of Santhosh’s recommendations.

by Sonia Ramachandran