Telstra fined $1.5 million after breaching scam rules
The Australian telecommunications company paid out after failing to use customer ID authentication processes.
Australian telecommunications giant Telstra has paid a $1,551,000 fine after an Australian Communications and Media Authority (ACMA) investigation found it had failed to implement customer identification authentication processes.
According to ACMA’s investigation, the flaw caused “168,000 high-risk customer interactions” during password reset and SIM change requests.
Of those interactions, 7,000 were with clients in vulnerable circumstances.
ACMA member Samantha Yorke said Telstra’s failure to implement processes led to thousands of Australians being at risk of serious harm.
“When ACMA adopted these rules in mid-2022, we identified that victims of mobile fraud lose an average of $28,000,” Yorke said in a statement.
“While there is no direct evidence that anyone has suffered losses due to these breaches, customers should be able to trust that their telcos are protecting their accounts from fraud.”
“SIM swap scams can be particularly devastating, as victims can lose their life savings, as well as control of their phone number and other personal information.”
Telstra also agreed to a comprehensive two-year judicially enforceable undertaking that commits the company to hiring an independent consultant to review its compliance with ACMA rules.
Customer ID authentication rules have reduced fraud in SIM swapping, Yorke said, and telcos must use multi-factor ID authentication methods before any action that could compromise a customer’s account can be taken. user.
“It is unacceptable that Telstra did not have adequate systems in place when the rules came into force,” Yorke said.
If you or someone you know has been a victim of a scam, please report it to Scamwatch immediately.
