November 16, 2004

(Knight-Ridder/Tribune Business News via NewsEdge) Japan’s ruling coalition has ruled that it will tighten identification requirements for the purchase of prepaid mobile phones in a bid to curb fraud.

The decision replaces an initial plan to completely ban prepaid phones in Japan, which raised objections from service providers.

Criticism also came from Japan’s European Business Community, which labeled the ban idea a "disproportionate response" and said other countries simply strengthen ID checks to combat fraud.

The proposed bill will prohibit the transfer of pre-paid phones to third parties, with violators facing prison terms up to two years or a maximum fine of 3 million yen ($28,500). About 2.7 million prepaid mobile phones are currently in use in Japan.

NTT DoCoMo has said it will stop offering prepaid mobile phone services, while Vodafone KK said it would tighten measures to verify identification.

The legislation will also require thorough checks on the identification of purchasers, ban multiple service contracts for the same individual and require services be terminated for phones used in crimes. Advertising such sales, purchases and transfers of mobiles will also be illegal.

In the first half of this year, prepaid mobile phones were used in 93% of phone frauds where criminals posed as relatives in urgent need of money, and in 66% of cases where fraudsters charged victims for services they did not receive, according to police who added that pre-paid phones are also used in drug trafficking, murder and robbery cases.

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