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Five Australian Telcos Penalized for Allowing Scam SMS Flood

ByHuey Yee Ong

Feb 22, 2024
Five Australian Telcos Penalized for Allowing Scam SMS Flood

Australia has taken decisive action against five telecommunications companies for their role in distributing bulk scam SMS messages, in violation of the nation’s stringent anti-scam regulations and public safety protocols. The Australian Communications and Media Authority (ACMA) identified Message4U, SMS Broadcast, DirectSMS, Esendex Australia, and MessageBird as the culprits behind the dissemination of millions of unverified SMS messages, some of which masqueraded as legitimate communications from reputable brands and government entities.

The Scope of the Scam SMS Issue

The volume of SMS messages sent by each telco over a span from July 2022 to June 2023 is outlined in the table below, providing a clear overview of the scale of the issue:

TelcoSMS Messages Sent
Message4U36.1 million
SMS Broadcast4.5 million
Esendex Australia6.7 million
DirectSMS1.6 million
MessageBird1.1 million (early 2023)

These messages often bore the names of well-known entities in shortened forms or as text-based sender IDs, making them seem credible at first glance.

The ACMA’s investigation revealed that:

  • SMS Broadcast and Message4U enabled over 1.2 million scam texts, impersonating well-known brands and government services.
  • Esendex was responsible for at least 99,000 scam texts.

This breach of trust and violation of national anti-scam measures prompted a stern response from ACMA, particularly in light of reports indicating Australians lost over AU$25 million ($16.31 million) to SMS-based scams last year alone. The emotional and financial toll on victims and their families underscores the critical nature of this issue.

ACMA’s Response to the Violations

Samantha Yorke, a member of the ACMA, expressed her dismay over the telecommunications companies’ negligence, emphasizing the paramount importance of robust verification processes for bulk message senders to prevent such breaches. She highlighted the sophistication of scammers in exploiting system vulnerabilities and warned that lax compliance by any telco could significantly endanger Australians.

Adding to the concern, the ACMA discovered that these companies also neglected their duty to contribute customer data to the Integrated Public Number Database (IPND). This database plays a crucial role in emergency response efforts, such as locating individuals during disasters and facilitating law enforcement activities. Yorke remarked on the absence of reported incidents stemming from this failure but stressed the potential risks associated with such non-compliance.

How Are Telcos Being Held Accountable for Public Safety?

In response to these violations, the ACMA has issued formal directives to the involved telcos, mandating adherence to the IPND and the industry codes aimed at Reducing Scam Calls and SMS. This action represents the most severe enforcement measure for initial breaches, with potential penalties reaching up to AU$250,000 ($163,079) for non-compliance.

The authority has pledged to vigilantly monitor these telecommunications providers for signs of continued scam activity and is prepared to impose further sanctions should any further endangerment to Australians be detected. This stance is part of a broader effort to combat digital fraud, illustrated by the recent sentencing of an individual to over two years in jail for orchestrating an SMS phishing scam that defrauded 450 victims of AU$100,000 ($65,232).

The ACMA’s crackdown on these five telcos serves as a clear warning to other companies about the severe consequences of facilitating or neglecting the spread of scam SMS messages, reinforcing the commitment to safeguarding the public against digital scams and ensuring the integrity of Australia’s telecommunications infrastructure.

Featured Image courtesy of TippaPatt/Shutterstock

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.