Just days after Vodafone sparked outrage by demanding £15,000 from the victim of a mobile phone theft in Barcelona, it emerged that it has slapped a £4,300 bill on a second holidaymaker on the same college reunion trip to the city, who also had his phone snatched.
Last week, the Welsh primary school teacher Osian Rhys Edwards, 29, was facing financial ruin after Vodafone insisted he was liable for its “reduced” bill of £10,500-worth of premium rate calls made by organised criminals – money he simply doesn’t have and would wreck his chances of buying a home.
Now it has emerged that another man in the same party – Owain Roberts from Anglesey – had his phone stolen and is also being pursued by Vodafone for a £4,300 bill. A third member of the group of six college friends was also the victim of phone theft in a city now gaining a reputation for epidemic levels of pickpocketing – but his mobile provider, O2, has not landed him with a huge bill.
The group has become a victim of one of Europe’s fastest-growing crimes, increasingly carried out by organised gangs that target tourists and, within minutes of the theft, use the stolen sim cards to repeatedly dial premium rate numbers until they are blocked – numbers set up to maximise revenue.
Vodafone insists customers are liable for the massive bills, but it is coming under intense pressure to back down.
This week, a barrister told Money it is highly unlikely the company would succeed in getting a court judgment for the debt. Legal representations have been sent on Rhys Edwards’ behalf, but Vodafone continues to insists he and Roberts are liable.
However, it is facing a backlash from customers shocked that irregular calling patterns are not monitored or phones blocked before massive bills are incurred. Banks intervene to stop credit cards being used this way, and limit a customer’s liability to just £50.
In March 2012, regulator Ofcom told mobile phone companies to put credit-card-style caps in place by the summer, and in December 2013, the Department for Culture, Media & Sport announced it had agreed a voluntary cap on liability to come into force in spring this year. But amid intense lobbying by the companies, this is still not in place.
In Rhys Edwards’s case, the thieves used Vodafone’s conference calling facility that lets users make up to six calls at once. This enabled them to run up the bill of £15,000 in a few hours.
Vodafone insists it has no record of him calling to report the theft, although Rhys Edwards insists he reported it within a few hours.
Roberts is in the same boat. Following his theft, the ex-maths teacher who works in the gaming industry logged on to his Vodafone account at the hostel where he was staying. He clicked on the “report phone stolen” link, and mistakenly thought that was all that was required. Instead, he only managed to order a replacement phone.
Both men say they were unaware their mobile contracts could hold them liable for such bills.
Their stories highlight the vulnerability of Vodafone customers, even those who have taken steps to keep their phones secure.
“A taxi had dropped us back on Las Ramblas, and we started walking to the hostel. I had my hands in my pockets and was trying to avoid contact with anyone by walking right down the middle of the road when a women grabbed at my crotch. I just jogged away.
“A few moments later, an English man, who had witnessed the event, asked if I had a spare cigarette. I gave him one and he promptly left. Sixty seconds down the road I realised my phone had gone. It’s clear I was targeted by professional thieves,” says Roberts, a Vodafone customer for 10 years.
Back in the UK he says he has faced a nightmare battling to get the matter resolved, contacting Vodafone stores and dealing with call centres in India and Cape Town. He was promised call-backs that didn’t happen, and was later told he had no choice but to pay.
Vodafone has agreed to reduce the bill by 25% as a gesture of goodwill, but this still leaves him owing more than £3,200.
In cases seen by Money, customers who refuse to pay the thieves’ bills have been faced with endless demands from debt collectors and the threat of default notices, which would ruin their credit record. But there is no record of the phone companies going to court to enforce the bills, which suggests they are not confident they will win.
Money asked Vodafone how many of these type of cases it had successfully sued and received no answer.
A Vodafone spokeswoman said: “It doesn’t take long for criminals to build up high charges, which is why we urge customers to report a missing phone as soon as possible. Until it is reported, customers are liable for all charges. Fortunately, we became aware of the unusual spend, and barred the account, or the charges could have been significantly higher.”
Interestingly, Ross Anderson, professor of security engineering at Cambridge university’s computer laboratory, wrote to Vodafone after reading about Rhys Edwards’ plight. His wife had her Vodafone stolen in the city several years ago, but the company later backed down after initially pursuing him for the bill.
He wrote: “It’s disgraceful to read in the Guardian that you are still treating customers this way. Do you not realise that you are committing an offence under Section Two of the Fraud Act 2006? I’d suggest you apologise and back off before he goes to the police.”
We have also been contacted by a Vodafone employee who told us that he has seen business account phones that have run up huge bills – in some cases as high as £75,000 – which are often written-off to keep big-spending corporate clients happy, and retain the business.
How to protect yourself
According to mobile telecoms analyst Francisco Jeronimo, it’s easy: “Mobile owners simply have to pin protect both their handset, and also their sim card. You’d be amazed at how few mobile users have even basic security on their phones,” he says. And he knows the problems – he has had a mobile stolen in Barcelona.
The research director at mobile analytics firm IDC says he was saved from the kind of bill foisted on the two Vodafone victims because he pin-protected his sim card. He strongly advises everyone with a contract handset to do so.
While an increasing number of smartphone users now input a pin every time they make a call or go online, there are still many who are not even aware that they can do so. Victims of phone thefts often find the card is removed and put in another handset, and then used to call premium rate numbers.
However, if customers pin-protect the sim, this would not be possible – unless the thief also knew the pin.
Jeronimo advises users to set up a different sim pin to that of the handset: “I often see people unlocking their phones making no attempt to disguise it. “A thief armed with your handset and pin can make life incredibly difficult – they can change all your passwords on iTunes and Amazon accounts. The hassle factor of trying to sort the mess that can result from a phone theft is incredible,” he says
Phone companies, he adds, have done relatively little to make customers aware it can be done. Users will need to know their existing sim pin number - 1234 is a common default. If that code does not work, contact your mobile operator or go into your nearest store and ask them how to do it. Don’t keep trying, or you might find you are locked out. After three attempts the thief – or you – is locked out.
Another option is to switch to Tesco Mobile. It offers all contract customers the chance to cap their monthly spend. Set your cap to £100 a month, and once the thief hits that the phone is cut off.
This is the model campaigners want adopted across the industry.
Chief executive of Citizens Advice, Gillian Guy, told Money this week: “Victims are being hit with runaway bills. We have helped holiday-makers who had their phones stolen whilst abroad and who come home to bills as high as some annual salaries. The financial aftershock can push people into debt.
“The government and phone providers must finally make clear the timescale for introducing its £50 cap on bills from stolen mobiles. Consumers will continue to lose out for as long as the promised cap is delayed. Phone companies can start offering better protection for consumers now, through more effective billing and fraud monitoring.”
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