Singaporean digital telecommunications company Circles Australia has paid a $413,160 penalty for failing to comply with telco customer identity verification rules that led to consumers being exposed to identity theft and financial losses.
An investigation by the Australian Communications and Media Authority (ACMA) found Circles.Life contravened the rules 26 times between January and February 2024 when it transferred mobile phone numbers to its service “without first adequately verifying the identity of the person requesting the transfer”.
ACMA says scammers had stolen these numbers and used them to access some people’s bank accounts - and as a result, affected consumers reported losses totalling at least $45,000.
Authority Member Samantha Yorke said this was “deeply concerning given the real financial harm for the consumers involved”.
“This kind of fraud can also lead to ongoing emotional impacts and stress as people have to recover their digital identities,” Yorke said.
Australian Communications and Media Authority (ACMA) says this is the second time in three years Circles.Life has breached rules designed to protect consumers from mobile number fraud - and in August 2022 Circles.Life paid a $199,800 penalty after the ACMA found it contravened the same rules.
“It is simply unacceptable that Circles.Life failed a second time to follow the identity checking rules that prevent criminals from committing mobile number fraud,” Yorke said .
ACMA notes that the Telecommunications (Mobile Number Pre-Porting Additional Identity Verification) Industry Standard 2020 sets out rules that require telcos to verify a customer’s identity before accepting transfers of mobile numbers from other telcos.
The ACMA says that its investigation found that the contraventions were due to the actions of customer service agents engaged through a third-party company not following identity verification procedures.
“Regardless of these arrangements, Circles.Life was ultimately responsible for complying with the requirements. Telcos should be aware they cannot outsource their legal obligations to protect Australian consumers,” Yorke said.
The ACMA says that the $413,160 penalty paid by Circles.Life is the largest the it has given to date for contraventions of these rules.
The ACMA has accepted a court-enforceable undertaking from Circles.Life committing the company to a review of its compliance with the identity verification rules. Circles.Life also voluntarily committed to contact all victims with an offer of compensation.
The ACMA says that Circles.Life has stated that it will cease its operations in Australia after it has transferred all customers to Amaysim, however the enforceable undertaking will remain in place in the event that Circles.Life re-engages with Australian consumers.
“Consumers should contact their telco and financial institution immediately if they think they have been a victim of a phone scam. Advice on how to protect from, and report, scams is here,” the ACMA concludes.