Aussie telco fined $2.5 million for failing to protect customers from scams

An Aussie telco serving regional Australians has been slapped with a massive fine after breaching anti-scam laws.

Southern Phone, a company based in southern New South Wales, has been fined $2.5 million for 168 breaches in just seven months, leading to customers losing $393,000, according to the Australian Communications and Media Authority (ACMA).

The communications watchdog reported scammers were able to bypass identity verification processes put in place by the telco, meaning customers' mobile number services and bank accounts were exposed.

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Authority Member Samantha Yorke said the breach gave customers serious financial and mental stress, and slammed the company for failing to detect the breach much earlier.

"Many individuals suffered substantial financial losses, and we know that identity fraud can cause lasting emotional distress," she said.

"The vulnerabilities in Southern Phone's systems went undetected for over a year and should have been identified and addressed much earlier to prevent consumers experiencing this harm."

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She said the penalty imposed on the company was the largest for breaches of this kind.

Southern Phone is also required to independently review its processes, perform regular security tests, and report to ACMA for the next three years.

The company, whose head office is in Moruya, New South Wales, also has offices in Melbourne and Bendigo in Victoria, and employs 250 staff. Its aim is "to deliver more affordable telecommunications services to regional communities," according to its website.

AGL, the parent company of Southern Phone, said it had made improvements since the breaches occurred.

"We have been working and cooperating with the ACMA's investigation and have strengthened our systems and processes to enhance customer identification verification and prevent unauthorised mobile number transfers," a spokesperson told 9news.com.au.

"We remain committed to safeguarding customer information and upholding compliance across all operations."

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