The following is a guest post from Simon Vella, CEO of InvolveMobile…

If you have any doubt whether SMS spam falls under the Telephone Consumer Protection Act (TCPA), you will be one of the remaining few in 2010. The TCPA has struck again, with the District Court of Northern Illinois recently upholding the FCC’s view of text messaging in Abbas v Selling Source. In this case, Abbas allegedly received SMS spam messages and sued Selling Source under the TCPA. Most of Selling Source’s arguments were rejected by the court, including their attempt at First Amendment defences.

There are now an increasing number of judgments extending back to 2005 that put SMS spam messages firmly into the sights of the TCPA. With the CAN-SPAM Act only regulating email to sms gateways, it now appears to be the primary vehicle for plaintiffs dealing with unsolicited text messages. Further to this, a Minnesota judge recently rejected the application of the Computer Fraud and Abuse Act to a receipt of text message spam.

While mobile marketing has not yet enjoyed the spotlight it should do, it has also avoided heavy handed regulation which affects other marketing channels. Text message consents often seem to lack clarity for consumers, both through website registrations and mainstream media interaction. The proliferation of mobile cell phone lists in past years shows that consent for mobile direct marketing has sometimes been a murky area. The cases we have seen to date are already having some significant impact on the mobile direct marketing industry, with recent removals of mobile phone lists from circulation by major list providers concerned about massive legal payouts. It gives a welcome reprieve to an industry that will be increasingly under fire.

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The dispute between 4INFO and Verizon seems to have been resolved, and access to 4INFO’s 44636 short code will be restored tomorrow morning, Dec. 10th for all Verizon Wireless customers.

Details have been limited as to what exactly the problem was, but it had to do with the types of ads 4INFO was placing in its messages.  ”Premium cross-promotion advertising” was cited by Verizon as the main issue regarding the blockage.

In a letter sent to 4INFO CEO Zaw Thet today, Verizon wrote “we are pleased you have removed all premium cross-promotion advertising from your service, or ‘“text2shortcode’” advertising as described in your letter, and that you are committed to ensuring all such advertising remains eliminated going forward.”

While vague, Verizon said their decision to block 4INFO’s messages on Friday was “all about the consumer.”  The company explained further in its letter to 4INFO that “there’s a long history of deceptive advertising practices related to premium short code campaigns, which has resulted in many class action lawsuits, consumer protection investigations and harm to consumers, and we are committed to protecting our customers from such practices and to abiding by industry standards.”

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Every now and then the truth spills out in regards to how the general public as a whole views mobile marketing from an engagement standpoint.  It’s easy to get caught up in the idea that mobile marketing can do no wrong, but when it comes down to those who actually interact with the medium, it sometimes tells a different story.

A recent study put out by BIGresearch took a look at the current composition of mobile marketing’s audience, and the results may surprise you.  A key finding, and one that may seem ominous to any mobile marketer, is that since June of 2008, the percentage of people who don’t like mobile marketing has increased.  More specifically, 67 percent don’t like text ads (vs. 64 percent last year), 60 percent don’t like voicemail ads (up from 57 percent) and 60 percent don’t like video ads (up from 56 percent).

Likewise, there’s also been an increase in the number of people saying that mobile marketing is an invasion of privacy — 52 percent of respondents, up from 50 percent in 2008 — as well as an increase in those saying marketers must get permission for such advertising- 58 percent as opposed to 56 percent a year ago.  This proves once again how important proper targeting and privacy are when constructing mobile campaigns.

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There’s been numerous studies, surveys and analysis regarding consumer’s view of SMS marketing and how they respond to messages from advertisers, with most coming to the conclusion that SMS marketing is always welcomed by consumers as long as its worth their while.

A new study put out by the DMA (Direct Marketing Association) polled consumers regarding their view of SMS marketing and found that users request much more control, as well as a sense of trust from the brands that are reaching out to them.  These so-called unwritten rules of acceptable engagement via mobile was what the DMA was interested in analyzing.

Gaining a sense of control over what messages are being sent to them, and the overall integrity and trust shown by the brands are the underlying aspects consumers request, with over half of respondents feeling that companies didn’t make the opt-in process clear enough, for example.  In addition, two-thirds of respondents wanted to choose the time of day they received mobile marketing messages, while the majority of respondents didn’t even know who had contacted them.

What consumers worry about the most with regards to SMS marketing is the underlying threat of SMS spam and the mis-conceptions surrounding the practice.  While only one-third of respondents believe that they are increasingly receiving more spam, the report reveals that people are confused about the financial cost of spam. One-third of respondents believe that simply receiving a spam message will result in a charge to their mobile bill, while the same number believe that opening a spam message results in charges.

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When a leading wireless provider sets out to launch a widespread SMS campaign with one of the most respected brands in the world, it’s common sense that the campaign will meet the most basic of SMS compliance regulations right? Nope.

Vodafone Hutchinson, parent company to Vodafone Australia teamed with Coca-Cola last October to launch an SMS-based campaign comprised of 100,000 text messages with the simple message “Take a hint from your PC and reboot. You’ll work faster. Reclaim your lunch hour with a friend. Escape with a Coca-Cola lunch break.”

The only problem was that Vodafone, Coca-Cola and the two mobile marketing providers responsible for the campaign; New Dialogue and Big Mobile all forgot the all-important unsubscribe link and a means to contact the sender in every SMS message sent.

The exclusion clearly violated Australia’s anti-spam laws that were put in place over six years ago, and the government slapped Vodafone with a $110,000 fine.  The manager of the regulator’s anti-spam team said the $110,000 payment, the largest through an enforceable undertaking under spam laws, was a further sign that the Government had toughened its approach to unsolicited email and text messages.  ”The law has been around for more than five years, so we really aren’t in the early stages of compliance,” Julia Cornwell McKean said.

That’s what’s so surprising to me about all this.  Not only should Vodafone be very well aware of any and all anti-spam and SMS regulatory issues – being a large wireless telco, but to have its two mobile marketing service providers (New Dialogue and Big Mobile) clearly violate the most basic of user-privacy and anti-spam laws is downright embarrassing to all parties involved.

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Smartphone apps are getting more and more comprehensive everyday it seems, and with the advent of location-based services, mobile social networking and other genres, privacy is becoming increasingly important.

There’s been a recent surge of developers and consumers that have noticed what some apps are doing behind the scenes in terms of gathering user information- and it’s raising concerns for those who value their privacy.  A programmer recently discovered, for example, that Pre’s smartphone OS was sending users’ GPS information back to Palm, even though the company’s privacy policy revealed as much.

In addition, ReadWriteWeb is reporting that mobile analytics company Pinch Media allows developers to insert code into applications in order to create a user profile.  The information is designed to help developers, although some consider the technique invasive.  If the user profile is used with good intentions to help the app in what ever it’s supposed to accomplish, then so be it, but when that user information is used for other purposes without the user’s consent, it creates a big problem.

The regulations associated with this sort of thing are very ambiguous- app developers submitting to Apple’s App store, for example, aren’t required to reveal what types of data they’re tracking.  Also, when users consent to have their location revealed, app developers don’t necessarily have to disclose what additional data they’re tracking.

Until regulation is put in place, the only defense is to go over every single line of your TOS and privacy policy associated with any new app you think will collect sensitive user information- since almost nobody will do such a thing, we’re still at the mercy of the app developers.

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The problem has been around forever, yet the mobile industry is still fighting for a solution to SMS spam.  As such a quickly growing problem, the FCC and several mobile-specific organizations are still trying to define what is and what isn’t considered mobile SPAM- a process that’s easier said than done.

Mobile spam can be sub-divided into two general categories: legitimate marketers not following best practices and sending unsolicited messages, and the more devious malware attacks, in which malicious messages are sent through text or e-mail to attack a phone’s operating system.  Either way, this spam is annoying to consumers, and is giving legitimate rule-following mobile marketers a bad name.

The MMA and other mobile communities have been busy creating industry best practices, rules and regulations to help legitimate marketers stay a step ahead of spammers and to remain transparent in their efforts, but the entire landscape changes so quickly that staying ahead of the curve is getting increasingly difficult.

Contributing to the intolerance of SMS spam is the fact that consumers often will stop what they are doing to read a new mobile message, and will likely have to pay a fee for receiving it.  Getting more and more spam messages makes consumers that much more weary of opening any marketing-based SMS message, legitimate or not.

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