By Shane Wilson

The BBC has reported that under an agreement between the UK government and four mobile operators, subscribers who have their phone stolen will now be protected from “sky-high bills.”

Culture Secretary Maria Miller has secured an agreement to cap the maximum amount customers of EE, Three, Virgin Media and Vodafone would be expected to pay to a similar level to the £50 liability cap on stolen credit and debit cards. The cap is expected to be in place from spring 2014.

The agreement is a direct response to protect consumers from potentially high bills run up by fraudsters using stolen phones. While the theft of the latest smartphone can generate a fast cash profit for thieves, organised gangs of fraudsters will use the phones to generate profit by calling premium rate numbers. It is an old favourite of the fraudster, as

Premium Rate Services (PRS) are simple to establish via a dealer or specialist agent.

With little to no direct interaction with a telecoms network, operators have struggled to gain any kind of real control over these lines. In 2010 UK operator O2 lost £1.2m in less than a month to a gang of fraudsters which was using stolen SIM cards to call overseas premium lines the gang had set up. It is a scam that leaves operators with huge bills to pick up.

While the latest announcement is directed at protecting the consumer, it indicates that at least amongst the UK networks there is a growing awareness of fraud and the impact it can have, not only on the consumer, but also the network itself. Many operators in Western Europe still fail to recognize the growing threat or understand the levels of fraud occurring within their networks. With networks actively protecting subscribers from fraud the hope is that this will change wider attitudes within the operator community towards identifying and removing fraud from the networks.