Cellnet fails to plug fraud loophole

CRIMINALS CAN still use stolen credit card details on Cellnet's "pay-as-you-go" mobile phones, despite measures intended by the company to plug a loophole that has been exploited for more than a year.

The security flaw means that people could be charged on their credit cards even if they never owned or used a Cellnet phone. It also means that Cellnet has failed to honour pledges to improve security, despite being aware of the widespread nature of the fraud in January.

Cellnet has consistently refused to say how many people have been defrauded, or for how much, claiming the information is "commercially confidential". But thousands of people have certainly been defrauded of up to pounds 1,000, say industry sources.

Cellnet has sold 1.5 million "top-up" phones since introducing them in July 1998. But soon after the launch, people began seeing bills for "Cellnet services" on their credit cards, even though they had not used the phone. The transactions were the result of organised scams by gangs. Often they offered cheap international calls on the phones, after acquiring victims' card details from discarded shopping slips.

A new system started this month which prevents the use of multiple credit cards, but it still does not require additional security checks on ownership of the credit card being charged.