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Android dev smacked with £50k fine over premium rate SMS scam

PhonepayPlus: You'll have to refund punters too...

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UK regulator PhonepayPlus has fined a Russian firm £50,000 after it was found guilty of peddling a deceptive Android application that signed unwitting victims up to a premium-rate text service.

Connect Ltd, trading as SMSBill, reportedly promised access to Android games. After the app was installed, a text message was also sent to a premium-rate number, generating a £10 charge on victims' phones from the resulting auto-reply message. After being charged, the consumer was redirected to the 7mobi.net "GamePortal", where they could play games.

The terms and conditions for the application only explained that a charge would be incurred six pages into the small print, and even then inaccurately suggested only a £5 charge would be incurred.

The dodgy behaviour was spotted by security researchers at Sophos. SophosLabs researcher Vanja Svajcer discovered a malicious link on Facebook that led to malware being downloaded onto his Android smartphone back in February. Aggrieved punters also lodged complaints about lack of pricing information and charging without consent with PhonepayPlus, prompting an investigation.

Connect Ltd was last week found guilty of "very serious" breaches of the PhonepayPlus Code of Practice for premium-rate phone services, as explained in more detail in an adjudication.

The unregistered service provider was ordered to refund affected customers within the next three months as well as paying the £50,000 fine. In addition, Connect Ltd is also obliged to lodge any proposals for new premium-rate services to the regulator before releasing them in the UK, during a probationary period of two years.

Consumers spent between £100,000 to £250,000 on the service, according to PhonepayPlus, although it is unclear how much revenue Connect Ltd itself made from the dodgy Android app.

More commentary on the information security aspects of the case can be found in a blog post by Sophos here. ®

Mobile application security vulnerability report

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