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Verizon Wireless Denied Restraining Order Against Alleged SMS Scammers

Posted: 17 Mar 2011 02:00 AM PDT

On March 10th, MMW covered the legal efforts by Verizon Wireless to end a reportedly fraudulent scheme perpetrated on wireless subscribers through premium SMS campaigns.
Verizon asked the U.S. District Court of Arizona “to put an immediate stop to the activities.”

On Wednesday, US District Judge David G. Campbell denied Verizon’s request for a temporary restraining order against Jason Hope and Wayne P. DeStefano, owners of companies Cylon, Jawa and EyeLevel Holdings. Campbell stated that the language of Verizon’s proposed temporary restraining order was “too general, and too focused on disputed factual matters, to give [the defendants] meaningful guidance as to precisely what actions would be enjoined.”

Verizon claims the defendants defrauded Verizon Wireless by misappropriating approved short codes for unapproved “shadow” campaigns that did not comply with Verizon Wireless’ consumer protection and disclosure policies. “Verizon Wireless recently became aware of the possible fraud and immediately launched an investigation,” the company said earlier this month in a prepared statement.
“This was a big victory for our company” said JAWA Founder and CEO Jason Hope. “Verizon Wireless is trying to use its dominant position in the wireless market to put third party content providers like JAWA out of business and we are going to fight them every step of the way.”

Despite Campbell’s denial of the restraining order, he recognized that Verizon “has submitted specific evidence that [the defendants] are doing business through shell corporations, using false business addresses, using websites that do not comply with industry standards and that trick consumers, and using diversionary software to prevent [the carrier] from discovering these activities.”

Verizon, however, believes it will be successful in court once the language issue is addressed.
“This case is about the fraud committed against us and against our customers, as we outlined in the initial complaint,” Debra Lewis, a spokeswoman for Verizon Wireless, was quoted by ConsumerAffairs.com. “There will be many hearings and decisions along the way.”