Vodafone Shuts Down Prepaid Phones Used In Fraud - Kyodo

TOKYO -(Dow Jones)- Vodafone K.K. (9434.TO) has begun unilaterally terminating services for prepaid mobile phones that have been used in fraudulent billing and other crimes, Kyodo News reported Tuesday, citing company officials.

The ruling Liberal Democratic Party and its coalition partner, the New Komeito party, plan to submit to the Diet a bill requiring users of prepaid mobile phones to provide personal identification documents at the time of subscription. Still, the measure is unlikely to enter into force until next year, Kyodo reported.

Vodafone's move will serve as a transitional anti-crime measure before the prospective law comes into effect.

The Tokyo metropolitan government has recognized as illegal the acts of sending fictitious bills by e-mail and postcards for adult entertainment websites and other paid services under a municipal ordinance regarding consumer affairs.

Kyodo reported that the metropolitan government has tracked down 291 mobile phone numbers used in such crimes and has requested that their service providers cancel the phone numbers.

Vodafone, the largest prepaid mobile phone service operator in Japan, has received information about 200 such phone numbers and has already canceled several of them earlier this month.

Company officials said most users of prepaid mobile phones in fraudulent cases are unidentifiable. It sent e-mail messages to those mobile phones warning that the phone service will be shut down unless the users provide personal identification documents.

Vodafone shut down services for some of those numbers after their users failed to submit personal identification documents after a few weeks, the officials said.

Last December, Vodafone modified its terms of use for prepaid mobile phone services so that the company can terminate the service if users' identities cannot be confirmed.

"We want to take firm measures against offenders in order to encourage usage among law-abiding customers," Kyodo reported one Vodafone official as saying.

Vodafone's move is expected to encourage other prepaid service providers to follow suit. It is also likely to encourage information sharing among service providers, local municipalities and police authorities.

The prepaid mobile phone service, which does not require basic monthly charges, has been popular among such users as parents giving mobile phones to their children and foreigners staying in Japan for a short time.

Because of its anonymity, however, the service is often used in crimes, prompting a national debate over how to regulate the service.

There are an estimated 2.7 million users of prepaid mobile phone services in Japan, Kyodo reported.

NTT DoCoMo Inc. (9437.TO), which did not have a large share in the prepaid market, has already decided to end the service.

(END) Dow Jones Newswires"

Posted to the site on 25th January 2005