I was using the cheezburger app, browsing through failblog, and this popup came up. Its an ad. Clever marketing for the scam. Didn't waste my time looking at the app but this is very shady. Someone that isn't knowledgeable could very easily download the app and be scammed into paying money. They really must be dumb, because it says ads.yahoo.com.
Maybe send it also to Apple ... they might be interested to figure out what app is promoted and have a talk with the provider. At least worth a try.
You could try via here: https://getsupport.apple.com/Issues.action or http://www.apple.com/feedback/ There is maybe also a link in iTunes with feedback on apps directly.
This smells more of a "wrapper" app, an app that is basically picking up the mobile webpage of the website and displaying it, much like the BBC sport app. If the site has nefarious advertising, then that might shine through the app to the user.
It could still be just pulling web data, including some sort of embedded pop-up type of calls or ads that can appear that way. It could still be the app itself in some sense, but that pop-up seems to be more like what you get with web content.