M-Qube Settles with Florida Attorney General's Office

  |  September 2, 2008   |  Comments

Firm agrees to pay $500,000 for allegedly enabling billing of ringtones promoted through fraudulent online ads.

Mobile content delivery and billing firm m-Qube has agreed to pay The Florida Attorney General's Office $500,000 for allegedly enabling billing of ringtones promoted through fraudulent online ads. In its ongoing crusade to clean up mobile content advertising, the Florida AG's Office has gone after several links in the chain of companies that advertise, sell, distribute and bill for mobile content promoted as "free" despite its actual cost.

The company has agreed to "adopt and enforce strict standards" for Web ads, according to the AG's Office. M-Qube itself doesn't advertise mobile content, but its partners do. The AG's Cyberfraud unit will monitor the firm, which is charged with ensuring its mobile content partners disclose the actual cost of ringtones and wallpapers in ads. M-Qube, which had been under investigation by the AG's Office since July 2007, is owned by Verisign, a data security and domain name firm. The company did not respond to ClickZ's request for comment Friday, the day the settlement was announced.

Previous agreements between the Florida Office's and mobile content advertising firms have required that ads and promotional e-mails prominently display details about price or terms of mobile content offers. For instance, a sponsored search result touting "Free ringtones" would have to be changed to something like "Free ringtones with paid monthly subscription of $9.99 per month."

Florida Attorney General Bill McCollum and his Cyberfraud division have taken an activist approach to snuffing out the scourge of fraudulent ringtone ads, the end result of which are often charges to unsuspecting consumers -- typically teenagers -- who thought they'd downloaded free content.

The department has been systematically chipping away at sectors of the mobile content industry, apparently in the hopes of getting players representing each step in the process to apply pressure to their own partners. It has settled with firms that conduct online ad campaigns to promote so-called "free" content, including Azoogle Ads and World Avenue, for instance, requiring the firms to make sure the ads follow guidelines.

In February, the AG's Office announced a large settlement with a significant wireless carrier, AT&T Mobility, for a total of $3 million; the Cyberfraud task force at the time also said it was launching investigations of Verizon, Sprint/Nextel, Alltel and T-Mobile. AT&T was nabbed for allegedly including charges for deceptively-advertised mobile content in wireless bills.

More recently, the Sunshine State office darkened the day for mobile content provider MobileFunster, the first mobile content provider to settle with the AG. The Hong Kong-based company agreed to cough up $1 million and require disclosure of content costs in ads for its products.

Don't expect McCollum and co. to curb their investigations of the mobile content ad sector anytime soon. The Florida AG's Office "will continue to pursue similar resolutions through this industry," Sandi Copes, press secretary for Florida's Office of the Attorney General told ClickZ News.

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ABOUT THE AUTHOR

Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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