Premium rate telephone re-routing scam

July 13, 2014 tags: Blog

In a case recently brought to us via Litigation Warranty the call centre lines of our client had been hacked and programmed to dial a premium rate telephone number terminating in Cuba. Over the course of the weekend a bill was run up approaching £100,000.

This risk is virtually uninsurable.

Our client very nearly paid up because his telephone service provider was threatening disconnection if he didn’t. Any disruption to service would have involved a risk to our clients business in terms of loss of contracts which could have been devastating.

This seemed to us to be unjust, so we mounted the following argument supporting the reasons for our client not having to pay. We won without having to issue Court proceedings or injunctions to prevent disconnection! If your business is a victim of a scam of this nature then you should not to pay the bill, even if you can afford to do so. You may even be committing an offence yourself if you do.

You will have been the victim of a criminal offence contrary to the Communications Act 2003. Such an offence generates a financial benefit for persons unknown. ‘Criminal property’ as defined in the Proceeds of Crime Act 2002 has therefore been created.

This definition is wide-ranging and includes property that represents the benefit in the hands of another, and ‘choses in action’ (e.g. bank balances). The benefit that the offenders generated or sought to generate is therefore criminal property. Any person who deals with the property or becomes involved in an arrangement to acquire, retain, use or control criminal property commits an offence under the Act. Therefore, any demand for you to participate in an arrangement where the end result will be to transfer money from you to the offenders, or to compensate those who have transferred money to the offenders, would lead to you committing an offence if you pay up. It also has relevance in civil context, in that a contract that requires illegality in performance is unenforceable by the offender or by anyone basing their asserted rights on commission of a crime, so there is a strong argument against civil liability too.

In a recent case before the Technology Court in Birmingham the Court distinguished between liability to pay for ‘use’ of the service, and liability to pay for ‘provision’ of the service. This distinction obviously needs close scrutiny of the contract documents.

If you are a victim of such fraud, and your provider is looking to you to pay the cost of the calls, or even if you have already paid, please contact us for help. We can defend or instigate civil claims on your behalf, or consider a private prosecution of those responsible for laundering proceeds of crime, which could lead to compensation for you.

This work is covered through membership of Litigation Warranty.

Direct Public Access Barristers with Fixed Fees