Mobile phone operator BT Cellnet will introduce sweeping new measures from the end of this month to stop fraudsters using its pre-paid mobile phones for free.
Anyone with a pre-paid handset is able to add extra minutes to their phone by calling BT Cellnet with a credit or debit card number. No other details have been needed, leaving the system wide open to abuse.
From September, it will be compulsory for everyone buying a BT Cellnet pre-paid mobile phone to provide details of their name, address and the credit card number they wish to use for that specific phone.
Britain's other three mobile operators, Vodafone, Orange and One 2 One, all demand names, addresses and credit card details for pre-paid customers that buy minutes using credit cards.
BT Cellnet hopes its new measures will slash incidents of pre-paid phone fraud, but accepts that the measures aren't watertight.
"They're as good as you'll get under any current system," said BT Cellnet spokesman Damian Peachey. "The very nature of credit cards means they're open to fraud. What we've tried to do is eradicate the majority of fraud."
"We would welcome BT Cellnet's improvements in security. But it's a pity it wasn't sooner, before people had been defrauded," said Chris Rowsell, mobile phone expert at Which? magazine, published by the UK Consumers' Association.
Reports of stolen credit card numbers being used to top up phones emerged several months ago. In March BT Cellnet said it had received over 200 complaints and was working with the police to tackle the problem.
But the fraud has continued. Last week one central London victim found three £50 payments to BT Cellnet on his First Direct Visa account, even though he has never owned a BT Cellnet phone.
Someone had used his credit card details, even though his card had not been stolen, to buy three £50 phone units. BT Cellnet refunded his money, but he was faced with the inconvenience of cancelling his credit card.
"How did they get the number and why was there no security checks on the use of it?" said the irate victim.
This week the company took steps to reduce the system's vulnerability by restricting users to using one credit card per pre-paid phone, with a maximum of two phones per credit card. Credit cards have also been restricted to a £150 spending limit per month.
Pre-paid mobiles have proved a huge success in the UK, liked for having no contract and no monthly bills. Supermarket Tesco now sells pre-paid phones for just £49.99.
The launch of pre-paid deals has caused a huge boom in mobile phone subscriptions. In the last six months, pre-paid accounted for 87 per cent of all new mobile connections in the UK, according to market analysts Dataquest. On 1 July this year, 36 per cent of all mobile connections were pre-paid, compared with just 2.5 per cent at 1 January last year, according to Dataquest.
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