£100 fraud cap on stolen phones

Mobile Phone Theft Cap – a new opportunity for Fraudsters?

“A cap on mobile phone bills run up by thieves after handsets are stolen will bring relief to millions of consumers, campaigners say.

Five service providers – EE, O2, Three, Virgin Media and Vodafone – say the £100 cap will be activated providing the phone is reported lost or stolen within 24 hours of it going missing.”

Following a certain amount of pressure from Government and Community Groups such as Citizens Advice and others, five UK Service Providers have now agreed to a £100 cap on charges customers are responsible for if their phones are stolen and used fraudulently, providing the phone is reported stolen within 24 hours of the theft being discovered.

This announcement was made through the UK media on Sunday 22 March 2015, but what seems unclear, is when the ‘clock starts ticking’ in respect of the 24 hour period a customer has to report their mobile stolen to their home network. Many hours can pass between the time a first fraudulent call is made from stolen handset, and the customer actually becoming aware that the phone has been stolen. There is no doubt that Government and Consumer Protection groups will insist that this 24 hour period starts from when the customer discovers that the phone has been stolen. Even assuming that all customers who are victims of theft will be honest when providing the date and time a theft was discovered, it is reasonable to assume that the time between a handset theft occurring, and the theft being reported, could increase to 36 hours or more.

What is clear from the announcement is that this provides yet another opportunity for the fraudsters. We are already well aware that some tourists in Barcelona are being offered up to €500.00 for their mobile phones on the condition that they report them stolen when they get back to their home country. Obviously there was a certain amount of risk associated with this for the tourist, who may find their mobile provider expects them to pay for any fraudulent charges incurred after the phone was ‘stolen’. Now they know that provided they are with a CSP who is a signatory to this agreement, their liability will not be capped at £100.00.