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UK Regulator Fines Firm for SMS Ad

In the latest in an increasing number of mobile spam cases, U.K. mobile service provider Moby Monkey is facing charges from a regulatory agency for a recent text messaging campaign.

The Independent Committee for the Supervision of Standards of Telephone Information Services charged Leeds-based Moby Monkey with launching a deluge of SMS text messages earlier this year that "seriously" misled consumers into dialing a toll number.

The group fined Moby Monkey £50,000 (about US$77,090), on charges that the firm duped users into placing the call by promising a "£500 Mystery Award" if they could answer a simple question. The agency said Moby Monkey offered only travel discount vouchers in return -- rather than money, as had been implied by the ad.

Additionally, the full value of the vouchers was applicable only if consumers purchased a number of trips.

The ICSTIS also said Moby Monkey had wrongfully sent the unsolicited messages to corporate users, children and the same recipients multiple times -- all violations of ICSTIS regulations.

Moby Monkey could not be reached for comment, and its Web site evidently has been closed, due to non-payment of its ISP. Sources close to the issue said the company initially had said that the short length of SMS messages (the format can support only a maximum of 160 characters) had precluded any sort of "extensive" explanation of the contest.

Complaints from mobile phone users about the ads began earlier this summer, when Moby Monkey began sending out the ads. The local Trading Standards -- a U.K. business and measurement regulatory body that received many of the complaints -- forwarded the complaints to ICSTIS shortly thereafter.

"We will not hesitate to take swift action against the small minority of service providers who think that they can abuse public confidence and trust in text messaging in order to make money with no regard for consumers whatsoever," said ICSTIS Director George Kidd. "Our sanctions against Moby Monkey ... reflect the serious consumer harm caused by their service and its promotion, and will act as a warning to the industry: misleading consumers in this way is totally unacceptable. Promotions of this kind are likely to be barred immediately and the offending companies fined heavily."

Additionally, Moby Monkey is affiliated with a Leeds-based advergame firm, Game 24/7, which also received an ICSTIS fine last year. The agency charged that Game 24/7 had offered ringtones and logos for download, but failed to disclose that consumers must place a toll call to access the files.

Like Moby Monkey, ICSTIS said Game 24/7 initially said that SMS messages were too short for the disclosure, but said it would address the problem; the regulatory group eventually determined that no changes had been made to the ongoing campaign.

Despite the controversy, Moby Monkey's services -- which also included ringtone downloads -- had previously received prominent promotion on the Web sites of partners including Vodafone .

The news is the most recent evidence of the growing threat of wireless spam. Unlike e-mail, recipients typically have to pay for each SMS that they receive -- making spam costly in more ways beside time and frustration.

Last month, Japan passed a law designed to curb the barrage of bulk, unwanted offers -- particularly solicitations for adult-oriented services -- that were being sent to mobile phones. Mobile providers including NTT DoCoMo were also instructed to begin developing spam filters.

In October, Verizon Wireless won a case against a company sending out repeated, unsolicited mortgage offers, in one of the first episodes of wireless spam in the U.S.

At the same time, the Moby Monkey debacle ironically also illustrates one of the major difficulties facing mobile marketers using SMS. Although SMS is the most popular format for wireless marketing, it's 160-character limit renders it difficult for advertisers to fit in "small print" disclaimers, as Moby Monkey claimed -- to say nothing about actual creative.

While the firm's motives remain unclear, the case has been made in the U.S. that the technological constraints on SMS should free at least one type of regulated advertisement -- political campaign ads -- from being required to disclose its origin or source of funding, which is the rule in other forms of advertising. Earlier this week, the U.S. Federal Election Commission granted New Jersey-based Target Wireless a waiver from the disclosure rule.