On May 9, 2012, the Texas Attorney General announced that its court case against an Arizona-based mobile marketing company, JAWA, and its owners and related entities, ended in a settlement requiring JAWA to pay $2 million and refund unauthorized charges. The case arose when JAWA was accused of collecting unauthorized or deceptive charges on consumers’ wireless bills in Texas through premium text message alerts. Under the settlement, JAWA is paying the state $2 million, repaying unauthorized charges to consumers, and establishing a toll-free number and website to assist affected consumers. The number is (800) 482-5392 and the website will be linked from jawa.com. Consumers will need to submit their cell numbers to obtain a refund. For future mobile marketing campaigns, JAWA must make detailed disclosures, establish a compliance program, and submit to random semi-annual audits.

Verizon’s suit against JAWA also appears to have settled. In a recent court filing, Verizon and JAWA state that the parties “have agreed to compromise and settle all matters and issues in dispute.” JAWA appears to have agreed to obtain prior written permission from a Verizon designee before initiating any premium text message campaigns on Verizon’s network and to comply with the Mobile Marketing Association guidelines and “any other Verizon specific requirements.” It is not clear if JAWA paid Verizon any money in settlement.

These cases demonstrate how mobile marketing campaigns, especially premium campaigns where consumers are charged in addition to their message plans, must be closely monitored for compliance with the wireless carriers’ requirements. JAWA got in trouble with both the government (the Texas Attorney General) and industry (Verizon), because of the allegations of how it was running its premium text message campaigns.

The Texas Attorney General’s announcement is available here.

The Agreement between the Texas Attorney General and JAWA is available here.

Verizon’s suit is Cellco Partnership d/b/a Verizon Wireless v. Jason Hope; et al., 2:11-cv-00432-DGC (D. Ariz.).

For further information, contact Michael B. Hazzard or Jason A. Koslofsky or any of our attorneys in the Telecom Group.