PAYG mobile phone scam?

diygardener · 13 April 2018 at 9:02PM

Thank you everyone for your suggestions. I have now reported this scam to Action Fraud and have a crime reference number which I have passed on to customer services at "Three".

I guess I've probably spent more on phone calls reporting this than I lost in the original scam, but I have at least made it perfectly clear to "Three" that I consider them complicit in this scam by not allowing me any way to opt out of the PayForIt service. I think they now understand I am taking this seriously. Being a PAYG customer means I have no itemised bill to refer to which makes it extremely easy for the fraudsters to get away with it undetected.

Am I correct in assuming that PayForIt transactions are not regulated by the Financial Conduct Authority?

Anyway - I now wait to see what will happen on Tuesday when the next "subscription" of £3.00 might fall due. I shall be checking my PAYG balance regularly and will report back here if any developments.

In the meantime, please everyone, be on the lookout for this and similar scams. Individual amounts may appear small but if thousands of people are affected, the profits for the scammers could be quite significant.

boliston · 10 May 2018 at 11:00PM

I have had some fraudulent charges on my mobile bill for the last 2 months - 5 lots of £4.50 from a scam company called "loaded mobi" - they have been useless in trying to resolve it and just sent me an email saying they cannot help me as I consented to the charges (i certainly did not!) - three have been quite helpful and agreed to refund my account in full but it seems annoying that "loaded mobi" can simply steal money from people and get away with it

AndyPix · 11 May 2018 at 9:27AM

Call your provider and tell them to put a premium rate bar on your number then carry on with life

paulmu · 11 May 2018 at 9:59AM

boliston wrote: »

I have had some fraudulent charges on my mobile bill for the last 2 months - 5 lots of £4.50 from a scam company called "loaded mobi" - they have been useless in trying to resolve it and just sent me an email saying they cannot help me as I consented to the charges (i certainly did not!) - three have been quite helpful and agreed to refund my account in full but it seems annoying that "loaded mobi" can simply steal money from people and get away with it

You are not alone in reporting the ‘loaded mobi’ scam. It has been reported on other forums and on Twitter. Some people have succeeded in getting a refund from them, but it required persistence. Just because you received a ‘goodwill gesture’ from Three you are not precluded from seeking a refund from LoadedMobi.

Loaded Mobi is just one of a number of ‘Payforit’ scams. Before charging to you phone account, these companies are supposed to obtain your consent via an online signup process.

You need to be aware that while you are connected to the internet via mobile data, your number may be passed by Three to third parties for charging purposes. The mechanism by which this happens is called 'Payforit'. This can’t happen while you are connected by WiFi. Once the third party has your number they can send you chargeable text messages.
If you read the small print of your agreement with Three you will find consent to do this hidden in there. I’m not sure how this sneaky method of obtaining permission to pass information to a third party will square with the GDPR.

The Payforit mechanism was intended to make it easy for consumers to purchase goods and services and have them charged to their 'phone bill. Unfortunately Payforit has proven to be very insecure and hardly a day goes by without someone reporting another ‘Payforit’ scam.

The problem is that there are various ways of abusing this system. Malicious javascript embedded in a web page can obscure the information which is supposed to be displayed. So for example you can get ‘subscribed’ by clicking start on a video. This is called ‘clickjacking’. A more recent exploit has been the embedding of code into mobile phone Apps which silently sign you up to these services.

When these companies make charges to your mobile phone, nobody checks that they have consent to do so. It is like someone walking into your bank, armed with only your account number, and claiming that they have consent to take money out of your account. They wouldn’t get far with your bank, but Three and the other mobile networks just hand the money over.

If they refuse a refund, the company who took your money should provide you with proof of your consent. Usually, faced with this demand they refund. Ultimately, the only way of forcing the issue is to pursue a legal claim. Thy will then be forced to either prove consent or pay back your money.

In order to limit the damage and the level of consumer dissatisfaction, the regulator (The Phone-paid Services Authority) requires all subscriptions costing more than £4.50 per week to have a ‘double opt-in’. This means that a PIN number is sent to your phone and you are required to enter the PIN to complete the payment. This, of course, makes it much more difficult to use Javascript exploits or rogue Apps to sign up consumers fraudulently. No surprise then that the majority of ‘Payforit’ scams are for £4.50 per week!

EE recently imposed a requirement for a double opt-in on ALL subscription services which should give better protection to their customers. Unlike Three, EE will allow their customers to opt out of ‘charge to bill’ which will prevent these charges.

The Phone-paid Services Authority (PSA) regulates companies operating via ‘Payforit’. They are a regulator and not an ombudsman, and will not assist consumers individually. However, they do investigate reports and take action including fines of up to £400,000 in the worst cases. It is worth reporting scams to the PSA but don’t expect too much!

Unlike most networks, Three will not allow you to opt out of third party charges. If you want to remain a Three customer you have no choice but to expose yourself to this extremely vulnerable system.
Dealing with these scams is time consuming and frustrating. In 2012, the networks provided a document in evidence to Ofcom called Mobile Operators’ Code of Practice for the management and operation of PFI. It states:

“Each mobile operator will take responsibility for ensuring that customer queries and complaints are dealt with in accordance with their regulatory obligations under General Condition 14. This includes resolving complaints directly or ensuring that the API or merchant clients resolve them in accordance with its internal processes and contractual obligations. If there is an allegation that an API or merchant is not properly dealing with the complaint, a mobile operator will secure resolution of that complaint directly.”

The assurance given in the last sentence of this paragraph is not happening in practice.

The Consumer Rights Act 2015 provides specific requirements for refunds for digital content. In particular Section 45(3) of the act requires that the refund be made back to the account from which the money was taken. This is not happening in practice. I have heard of refunds being made by text based postal order, Paypal or Bank Transfer. The method is either inconvenient or required giving additional personal information to the company. Section 45(4) of the Act requires that refunds be provided within 14 days of the agreement to refund. In practice this is rarely complied with. Refunds are promised, but need to be continually chased.

I have created a website http://payforitsucks.co.uk to assist consumers when they have problems with ‘Payforit’ scams and to campaign for this system to be reformed to provide proper consumer protection.

paulmu · 11 May 2018 at 10:03AM

AndyPix wrote: »

Call your provider and tell them to put a premium rate bar on your number then carry on with life

Whatever you do DON'T rely on a Premium rate bar to protect you from 'Payforit' scams. The effect will be that you will not see the texts, but WILL still be charged. Three admit that they cannot stop these charges. Some of the other networks can. You need to ask for a 'Charge to Bill' bar. I believe that O2, Vodafone and EE can offer such a bar.

PAYG mobile phone scam?

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