The app (Mofono) has been noted by giffgaff and the use of it is against section 3 of the T's & C's which you confirmed you'd read when you joined.
... you will not use or permit anyone else to use your SIM Card:
a. For any form of automated usage of mobile services;
The app counts as automated usage as it isn't you actually sending the texts, it's an app spamming messages. If you use it, you will almost certainly be barred from giffgaff's services.
Uninstall the app and contact the agents, and they should remove the bar. They should respond within 24 hours, but due to many people being affected by this, it might take up to 48 hours, plus an extra 24 hours for the bar to actually be removed.
It texts numbers allocated to networks other than the one you're using, causing O2/giffgaff to be charged an SMS termination fee.
As the message is basically garbage data, the termination fee is for nothing, the SMS gets thrown away by the other network or the receiver's device/server.
These numbers used by Mofono also have a higher termination fee. Instead of charging you, the member, giffgaff swallow up this cost and provide the texts as part of your bundle.
It's a question of how Mofono make money... The receiving networks are the ones who are getting the money, so how does that transfer over to Mofono? At about 2 Euro cents per SMS (in July 2018), Mofono give you 0.45p/SMS. All the rest is shared between the receiving network and Mofono it seems.
@i_am_sy's thought is that Mofono may have bought a defunct MVNO or two. That means they'd take over the contract with the MNO and convince them to agree to a deal where they get part of the termination charge revenue. The MNO can't back out, else they'd be breaking the contract, meaning they are stuck Mofono abusing their services. If this is right, Mofono end up with 100k numbers (07xxx 000000 - 07xxx 999999), a share of the SMS termination fees, and access to the main network's systems. Remember it's all assumptions and guesswork at the moment.
They could also be faking their numbers as being abroad. That way, the charge gets routed abroad and giffgaff are charged by the foreign networks termination fees, which are likely higher than the UK networks', turning that foreign network a humongous profit for "delivering" texts.
- You will be barred if you use it
- It spams texts every 5 mins to other networks
- giffgaff get charged at least 2 euro cents for each of these messages (which is a lot on the already thin margins)
- Mofono end up with a bunch of profit
- You end up with barely anything in comparison
- We'll all end up with price rises if it was allowed
Myself and @i_am_sy worked this out at about 1 am last night. :P