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Sex, Texts, and Spam

Making a dishonest buck by fleecing the lonely

By D-DonohoePublished about a year ago 9 min read
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Sex, Texts, and Spam
Photo by Lindsey LaMont on Unsplash

“Hi, this is Wendy from RedHotPie, text back YES so we can talk”

This innocuous text message was received by thousands of people, who were just about to be fleeced of their money in an unscrupulous scam that targeted the lonely.

After a protracted investigation by the Australian telecommunications regulator, the full scope of the offending was brought to light. It resulted in one of the largest civil penalties ever imposed on individuals in Australia and sent a message to companies that sought to use spam as a basis for their business model.

The basic premise

As early as 2005, complaints began to be lodged with several different Australian regulators about an SMS messaging service called SafeDivert. Customers were being charged exorbitant amounts of money for messaging through the service without being made aware that each message they sent would be charged at a rate of $5.

Hundreds of complaints were lodged with telecommunications providers, the Australian Competition and Consumer Commission (ACCC), the Telecommunications Industry Ombudsman (TIO), and the Australian Communications and Media Authority (ACMA). The nature of the complaints was eerily similar.

The complainants were members of dating websites, they would begin communicating through those websites with a woman. Very soon into the communication, the female would ask for the man’s mobile number so that they could arrange to talk more and meet in person. The man would provide the number and soon after would receive a message like:

Hi there, this is Penny for HotToDate.com, message back YES so we can talk.

As soon as the man would reply with a yes, they would be incurring a fee of $5 per message. In the early years that this activity was occurring, there was no message to advise that each message cost $5. Additionally, there was no warning when a customer had spent $100 through that premium service.

When the man would question why he had to use that service, the woman would tell him that it kept her mobile number safe until she was sure he wasn’t someone she had to worry about.

In truth, the woman would not be providing her phone number ever. She had no intention to meet the man, her only role in all of this was to keep him sending messages to her to allow their employer to make more money.

Individuals that believed this story would keep texting with someone they thought was genuinely interested in a relationship. There were instances of people receiving telephone bills worth thousands of dollars.

The complaints continued but only one regulator acted. In laterThe ACMA issued a fine to the registered operator of the SafeDivert service, a company innocuously named International Machinery Parts Pty Ltd (IMP). Under the Australian anti-spam legislation, The Spam Act 2003, IMP was issued an infringement for $4,400 for sending commercial electronic messages without an unsubscribe function.

The complaints continue

IMP clearly not dissuaded by the $4,400 fine continued their operation with impunity. After all, they had established a successful business model that was raking in cash from those looking for love (and yes, those looking for a quick hook-up with a young attractive woman who didn't care that this guy was a balding, overweight gent about 30 years her senior).

The ACMA continued to receive complaints but regularly would tell complainants that because the messages were not advertising something they didn’t meet the definition of spam messages (this advice was incorrect, and we’ll get into that later). Complainants were instead advised to contact the ACCC as it appeared this was a consumer issue. Upon contacting the ACCC they were told it was a matter to resolve with their telecommunications provider, but if that didn’t help to contact the TIO. Often, contact with the TIO would result in them being told that since it was a premium SMS, they had no jurisdiction and that the customer should contact the ACCC or the ACMA.

It was no wonder, that people became angered by the government’s response.

Various online forums would discuss the “scam” as well as the frustration with the apparent inaction. Legitimate dating websites were also having to deal with the blowback from customers.

Then, in late 2007, the ACMA commenced a fresh investigation following a review of the large volume of complaints about the SafeDivert service.

The laws

Australia passed anti-spam legislation in 2003. The Spam Act 2003 contained some harsh penalties for individuals and companies that breached the provisions of the legislation. Despite the title of the legislation, the word “spam” doesn’t feature once within the Act. Instead, it talks about a commercial electronic message.

Sending unsolicited commercial electronic messages can result in a company being liable for a civil penalty of up to $1 million a day for every day that they send messages.

The basic definition reads like this:

For the purposes of this Act, a commercial electronic message is an electronic message, where, having regard to:

(a) the content of the message; and

(b) the way in which the message is presented; and

(c) the content that can be located using the links, telephone numbers or contact information (if any) set out in the message;

it would be concluded that the purpose, or one of the purposes, of the message is: and goes on to list thirteen different scenarios. The first is:

(d) to offer to supply goods or services

This is what we normally think of when we think of a spam message: advertising penis enlargement medication, or some other product you don’t really need. But the legislative drafters considered other scenarios including:

(n) to assist or enable a person, by a deception, to dishonestly obtain a financial advantage from another person; or

(o) to assist or enable a person to dishonestly obtain a gain from another person.

It was on these two sub-defintions that the ACMA concentrated its efforts. Proving that the individuals and businesses behind SafeDivert were using dishonesty to obtain a gain or a financial advantage from another person.

The main challenge would be to prove that there was dishonesty. To do this it would be necessary to show that the service was not about keeping women safe while they message men, but instead was just to generate income.

The investigation

The AMCA has a series of investigative powers by virtue of the Telecommunications Act 1997 which allows it to require the production of documents from telecommunications providers, other companies, and individuals. It also allows the ACMA to compel individuals to answer questions, even where they may incriminate that individual.

ACMA investigators began serving notices on companies connected with or affected by the Safedivert service. This included telecommunications providers, dating websites, and premium SMS messaging providers.

In the early stages of the investigation, the ACMA uncovered communications with the previous director of IMP, Scott Gregory Phillips, and one of the premium SMS providers they used. Following a spate of complaints, the premium SMS provider asked what Safedivert was and how they were using it.

Mr. Phillips happily discloses in that email that “Customers are being lured into chat sessions through dating sites like adultmatchmaker.com, rsvp.com etc”.

Through the investigations, it became apparent that a few companies were used to try to limit the attention that each would receive. Not long after the fine was issued to IMP, the Safedivert service was then shifted to Jobspy Pty Ltd, then to another Australian company Winning Bid Pty Ltd. Eventually, it moved to Hong Kong-based company Mobilegate Limited.

Former employees were identified and compelled to answer questions about their knowledge of the Safedivert service. This identified the full extent of behavior and the knowledge of those involved.

The people behind the scheme

The faces of those behind the scam soon also came to light.

Scott Gregory Phillips was known as an internet porn king. He had made his fortune from various adult websites. Then he’d been arrested and convicted of torture and robbery. He was incarcerated for a large part of the Safedivert activity.

Scott Mark Moles was the Director of Jobspy Pty Ltd. He too had made his fortune in pornography. Moles was later named in a civil suit brought by a former Miss West Virginia, Allison Williams. Moles and his companies had hosted a video purporting to be Ms. Williams from a leaked sex tape. In truth, it was not Ms. Williams, but Moles didn’t see any need to let the truth get in the way of his profit-making.

Simon Anthony Owen had been involved with Scott Phillips from the start of Safedivert. He ran the day-to-day operations and was later listed as a director for Winning Bid Pty Ltd. He often responded to inquiries from premium SMS providers and telecommunications providers.

Tarek Andreas Salcedo markets himself as a businessman. He bought into the Safedivert businesses and moved it over to Hong Kong, right around the time the Australian regulators were starting to poke their noses into his business.

Glenn Christopher Maughan was an employee of the business. In most instances, a company employee would not form the focus of a prosecution. But his involvement was beyond simply doing his master’s bidding. Maughan was involved in the day-to-day operations and helped to facilitate them from the start.

The trial

Initially, there was a lot of bluff and bluster from the respondents. The old saying that there’s no honor amongst thieves rings true here. They began to blame each other, insisting on their own innocence.

But soon, the wheels fell off that defence.

Before too long, Mobilegate Limited, Winning Bid Pty Ltd, and Jobspy Pty Ltd accepted their fates. Mobilegate was fined $5 million, Winning Bid $3.5 million, and Jobspy $4 million.

For the individuals involved, Simon Owen copped $3 million for his involvement and soon afterward fled to South Korea. Tarek Salcedo was also handed a $3 million fine, and for his part, as an employee, Glenn Maughan received a $1.25 million penalty. Scott Moles received a civil penalty of $2.5 million.

The only one to fight the charges in court was Scott Gregory Phillips. His defence was to blame the others. He claimed that he’d been out of the country or incarcerated when the offending occurred. His claims didn’t fool the Federal Court Judge, however, who in the end fined Phillips a total of $2 million.

Scott Phillips outside court

The Judge throughout the case had heard troubling evidence. He had heard stories of people with cerebral palsy being targeted without any conscience. Or the tale of the man who had bought chocolates and flowers to meet the woman he thought would be flying in to spend some time with him, only to be left standing at an airport alone.

In his final judgment on the case, the presiding Federal Court Judge described the Safedivert service in the following way:

Its ethos, its whole reason for existence, was to practise deception for profit on those who used dating websites, and in particular, to deceive those vulnerable to being deceived.

When speaking about the magnitude of the penalties, Justice Logan explained his reason for such high penalties:

“in my opinion, penalties must be of such an order that having regard to particular gains which might be involved, it is in effect commercial suicide to seek those gains via contraventions of the Spam Act”.

The prosecution made international headlines and at the time represented the largest civil penalties ever awarded against individuals in Australia.

In the years since Australia has seen significant prosecutions under the Spam Act, likewise, other countries have sought to model their legislation after Australia's.

You can find the judgment here:

Thank you for reading. Please like, comment or even feel free to tip.

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About the Creator

D-Donohoe

Amateur storyteller, LEGO fanatic, leader, ex-Detective and human. All sorts of stories: some funny, some sad, some a little risqué all of them told from the heart.

Thank you all for your support.

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