Judge denies restraining order motions in Verizon SMS fraud suit

An Arizona judge has denied a temporary restraining order sought by Verizon Wireless (NYSE:VZ) to halt the activities of companies the operator alleges are behind a scheme to defraud subscribers via premium SMS campaigns.

U.S. District Judge David G. Campbell moved March 11 to deny Verizon's request to restrain the business activities of defendants Jason Hope and Wayne P. DeStefano, cited as owners of firms including Cylon, Jawa and EyeLevel Holdings. Campbell's order nevertheless states 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."

According to Campbell, the language in the proposed temporary restraining order is "too general, and too focused on disputed factual matters, to give [the defendants] meaningful guidance as to precisely what actions would be enjoined." However, Campbell also rejected Hope's counterclaim requesting a restraining order against Verizon, explaining the defendants have failed "to present any specific evidence to support the denials or to refute the allegations of wrongdoing contained in [Verizon's] evidence." Campbell adds that the court cannot conclude the defendants have a fair chance of succeeding on their claim that Verizon's conduct is improper or that its statements are false.

Verizon Wireless filed suit last week alleging that Hope and DeStefano misappropriated approved short codes for unapproved "shadow" campaigns that failed to comply with the operator's consumer protection and disclosure policies. The sites promised video game tips, recipes and related information without properly disclosing how much the mobile data services would cost, the suit claims. Verizon contends the defendants blocked certain IP addresses from accessing websites connected to the shadow campaigns or funneled visitors to shell websites, effectively preventing the carrier and its auditors from identifying the sites during the course of its premium SMS monitoring efforts.

Texas Attorney General Greg Abbott has filed a similar SMS fraud suit. The Texas AG's office tells ConsumerAffairs.com that a Texas judge signed a temporary restraining order against Jawa and other defendants Tuesday after language issues in the request were resolved.

For more:
- read this ConsumerAffairs.com article

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