Premium SMS Fraud

paulmu · 24 December 2017 at 3:27PM

These scams are truly outrageous, as is the attitude of the mobile service providers who allow the scammers to help themselves to their customers’ money and then take no responsibility for having done so.
In my own experience, getting the scammers to refund your money is unlikely to succeed. Even the regulator cannot or will not, stop these scams, probably because they are funded by the companies who benefit from them.
The only way to reform the system is to mobilise public opinion to insist on reform. In Australia this has proved at least partially successful with two of the major mobile service providers, Telstra and Optus, stopping the processing of third party subscriptions. It would be great to see one of the major UK providers do the same.
http://www.abc.net.au/news/2017-08-29/telstra-opts-out-of-third-party-billing/8851982
https://www.itnews.com.au/news/optus-dumps-billing-for-third-party-content-subscriptions-479568

In 2012 Ofcom undertook a consultation on the regulation of these services.
https://www.ofcom.org.uk/__data/assets/pdf_file/0019/46513/statement.pdf
It makes interesting reading, particularly the comments of the major networks from para 5.20 onwards concerning this issue. It has become clear that these assurances have proved to be wildly unrealistic.

There is, currently, nowhere for the customer to seek redress. The PSA will consider a complaint, but will not investigate or adjudicate on individual complaints. They can impose financial penalties on the culprits, including ordering them to refund consumers. However PSA admit that these financial penalties are difficult to enforce, and many financial penalties are never enforced or collected.

If a consumer attempts to get their money back from the scammer and the scammer fails to respond in any way, there is nowhere for the consumer to turn to for support. No ombudsman, no ADR, and no help from the people who allowed their money to be stolen in the first place! The small claims court is about the only option, but only if you can find the address to which to serve the claim. Even then enforcing a judgement paid is likely to be difficult.

It is time that this iniquitous system was reformed, to allow consumers the same redress that they have, for example, with unauthorised direct debits or unauthorised credit card transactions. If a transaction is disputed by the bill payer, the recipient of the funds should be required to provide proof that the payment was authorised.
Another issue is that, even if the service provider accepts that a refund should be made, there is no proper mechanism for that to happen. There is a general principle in commerce that refunds should go to the account from which the original payment was made. One of the reasons for this is the prevention of fraud. If a retailer refunds a transaction made on a credit or debit card, the refund will be made to the same card. If a fraudulent payment occurs on my bank account, the refund is made to my bank account. If a Paypal payment is reversed, the refund will go to my Paypal account. However, if a fraudulent or incorrect payment is taken from my ‘phone account, the refund has to be made by some other method. Frequently, it would seem, this is by text message, which then has to be taken to a post office, consuming a disproportionate amount of time! This is just plain ridiculous. The refund should be made to the account from which the money was taken and with the same speed and ease as the transaction which is being reversed. The fact that this appears to be ‘technically impossible’ just goes to show how broken this system is.

By providing a mechanism for third party payments to be taken from consumer’s telephone accounts, the Mobile Networks are setting themselves up as payment processors. I therefore believe it is fundamentally wrong for them to be exempted from the requirements of the Payment Services Directive v2, as currently appears to be the case. If this legislation were to apply, consumers would be given much better protection from fraud.
Ultimately it is not good enough to say that the Mobile Networks are just providing a payment mechanism. They are responsible for the design and rules of that payment mechanism, agree to provide it to their customers, and profit from it. It is time that the regulator forced them to take their responsibilities seriously and provide support to customers who have been defrauded.

The regulator is currently consulting on its business plan for 2018/18.

https://psauthority.org.uk/blogs/2017/december/consultation-on-our-business-plan-and-budget-2018-19
I am making a submission as an interested consumer and I would urge others to do the same.

lqi · 24 January 2018 at 3:46PM

I started getting these also. I hate mini videos cluttering my phone so I know for sure this is unauthorized. The phone number offered does not work for Remote Games Ltd. The STOP text does not work. I am really angry that companies invade my privacy and just take money like this! Have not seen the amounts yet on account but it is obviously connected to account.....