SMS scam watch

Reporter: Helen Wellings
Broadcast Date: January 25, 2006

Watch out, because your mobile phone may be the SMS target of a clever scam. Helen Wellings looks at the latest alerts and how to keep your phone safe.

Australia's 20 million mobile phone users are coming under attack from scammers and fraudsters. Complaints to the telecommunications ombudsman about bills for premium rate SMS have tripled in the last year.

Gordon Renouf of the Australian Consumers' Association (publishers of Choice magazine) said text spam topped the list.

"There's more and more of this kind of spam going to go out to consumers," Mr Renouf said. "It's only going to get worse unless the regulations are fixed up."

The latest rackets attacking mobile users left, right and centre are offers of so-called "free" ringtones. For example, "you've won a competition for a trip" scams and innocent-looking text messaging designed to trick you into replying.

[Related story: Mobile credit risks]

IT expert Steve Marr was intrigued when he received an SMS from someone saying "Hi, it's Susan. I'm back. Contact me."

Thinking the message was from an old acquaintance just back from overseas, naturally Steve sent back a text message.

"All the text messages were inviting and playful and much like a friend would text you - that's really what got me in," Steve said.

"It came back with a very bizarre message saying "blonde hair, blue eyes, long legs. Does that help?"

"I thought, 'I still don't know who this person is, but they're having a lend of me. Someone's got a sense of humour, I'll play along'."

After a few text messages, Steve discovered he could not make a call from his prepaid mobile, even though he had just bought $30 worth of credit. Steve had been scammed.

By replying to the message, he had automatically become a subscriber to a chat service. Each time the service messaged him, he was charged $4. His replies cost him 50 cents.

Choice's Gordon Renouf said such tactics were illegal.

"Another thing that almost certainly applies is the Trade Practices Act," Mr Renouf said. "Because these people are actually tricking you into signing up for a product or a service and that's misleading conduct."

But he added that, ironically, the Spam Act - meant to specifically apply to unwanted messages - has big loopholes. The scammers continually get away with it.

Paul Oar-Zins was another scam victim.

"They just continue to send me messages almost on daily basis," Paul said. "I didn't realise they were costing money, I was just looking at them, reading them and ignoring it."

Paul received a text message advertising a competition.

"I had an opportunity to win an mp3 player. They said it was $2 per message sent and $2 per message received so I said I didn't want to take part. I thought that would be the end of it."

But when Paul went to make a call on his prepaid phone, his $40 credit had disappeared. He had actually been charged for reading unwanted messages, again $4 up for each message.

"I don't even know how they got my phone number in the first place, but they're just taking my money without my permission they seem to get away with it," he said angrily.

Free or cheap ringtone offers can be another vicious scam. Once Paul Dale accepted the offer for a ringtone at $5, he kept receiving more messages.

"Every five days they send you a message saying 'you can get a ringtone here'. I assumed it was just advertising, because I hadn't signed up to anything."

But Paul had accidentally registered with a company known as Mobile Active. When he checked his bills, he realised he had forked out not $5, but $195, for just one ringtone.

The catch is that once you receive your ringtones, the only way to stop being billed continuously is to opt out.

"You have to cancel, but I didn't think you had to cancel something you didn't subscribe to," Paul explained.

Gordon Renouf was concerned about the hundreds of thousands of young consumers with mobile phones, all easy targets for scammers.

"Kids are going to be more likely to respond to messages and less likely to hit the stop command," Mr Renouf said. "And so that's a real worry, in terms of parents who are going to be paying for their children's mobile phone bills."

If you want to make a complaint, you may find it difficult to work out which authority has the power to help you and stop the scams, especially in the case of overseas companies.

The best advice is to start with the Australian Communications and Media Authority and your phone service provider. Also try the Telecommunications Industry Ombudsman.

Steve and Paul Oar-Zims have finally received refunds. But not everyone is that lucky. Once you reply to an SMS, then try to unsubscribe, you could be hit with more bills.

Steve's warning: "My message to everybody out there, particularly kids is, do not respond to anybody [if] you don't know who they are. It's just not worth it."

Have you been the victim of a mobile phone scam? Tell us and get a fair go: click here.

Contact information for organisations mentioned in our story:

The Australian Communications Media Authority: Report to online@acma.gov.au or use ACMA's online report form on its website.
The Telecommunications Industry Ombudsman (TIO): 1800 062 058 or www.tio.com.au