Home > Latest News > Telco Circles.Life Fined $200,000 For Fraud Rule Breach

Telco Circles.Life Fined $200,000 For Fraud Rule Breach

Circles.Life, a Singapore-based telco who brands themselves as “a telco for life”, is facing a fine of $200,000 for breaching fraud regulations.

The budget telco that makes use of the Optus network, was called out by the Australian Communications and Media Authority (ACMA), who found that the company failed to conduct proper identity checks, leaving almost 2,000 customers at risk of fraud.

The ACMA, who has increased it’s focus on phone scams for 2022 and 2023, found that the Circles.Life did not check the identities of customers transferring their numbers from other telcos on 1787 occasions last year. This in turn, resulted in 42 consumers falling victim to fraud with compromised emails and bank accounts.

In addition to the $200,000 fine, Circles.Life will be required to pay over $100,000 in compensation to affected customers.

According to the chief executive of Circles.Life Australia, Nicholas Demos, the company had introduced a one-time password verification process for online port-ins, but had failed to do so for port-ins via its retail channels.

“While other verifications and security measures were in place, it represented a vulnerability in our process and breach of the industry standard,” he said, adding 42 customers were impacted when their numbers were ported – although this has been rectified,” he said.

“All 42 numbers were returned to their rightful owners some time ago and new processes and policies have been implemented to ensure that this never happens again. In fact, within two weeks of becoming aware of the situation we had designed, tested and deployed a fix which closed the vulnerability permanently.

“This is a first for us and we are deeply sorry to our customers, and the industry, as we know this represents a loss of trust. We have an enviable record and have established telco operations in five very different countries around the world and successfully navigated five unique regulatory landscapes with their own rules, processes and legislation.

“We have never made an error like this before and we’re committed to ensuring it never happens again.”

According to ACMA chair Nerida O’Loughlin, the watchdog is happy to see Circles.Life acknowledging the error and compensating customers accordingly.

“It is deeply concerning that Circles.Life did not have proper processes in place for such a long period and that so many people were affected or put at risk of identity theft and fraud,” she said.

“Some of the victims have experienced significant stress due to Circles.Life’s failure and we are pleased to see the company is providing recompense to acknowledge the profound emotional toll and disruption.”

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