Android dev smacked with £50k fine over premium rate SMS scam
PhonepayPlus: You'll have to refund punters too...
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. ®
@AC: "Because it is Android nobody bats an eyelid?"
This isn't an OS issue. They're exploiting customer naivety with a complex contract, and there's nothing an OS can do to overcome that. It's more of a confidence trick than a tech exploit.
Yes, this has never happened with an iPhone app. Oh wait... http://www.theregister.co.uk/2010/01/27/iphone_admob/
Re: @Ralph 5
"Android is designed to allow this very thing to happen."
As has been stated, yes it is. But this is not an OS error, but a scam and a user error.
Every time an app is installed, you are told what "permissions" it is requesting. The fact that users don't bother to read these is their problem, not a problem with the OS. It is like someone running Windows blindly clicking yes in answer to a dialogue box asking for Admin rights, similarly in Linux/Unix GUIs.
In a well designed OS, it is the resonibility of the user and the administrator* to make descisions relating to the security of the system. "The price of freedom is eternal vigilance". I'd rather have my freedom than the restrictions of Apple.
*In terms of mobe's, the user and admin are normally one and the same, although most users don't realise. In Apple's case, they have decided users can't be trusted, so they become the administrator.