The Scam of Meteoric Proportions

February 12, 2017

Bringing your Billpay phone on your  citybreak? Think twice -a cautionary tale.




I am currently being pursued by Meteor for  €7,000 worth of  roaming charges incurred on my Meteor billpay phone. These charges were incurred by thieves  when my phone was pickpocketed on holiday in Barcelona and weren’t immediately apparent until an unusually high phone bill arrived a month after my trip.  I  had unfortunately delayed in reporting the phone stolen until the  day following the theft, so Meteor are insisting I am liable for the charges. In efforts to force me to pay, they have unlawfully reported me to a credit reference agency without  obtaining a court judgement holding me liable.


My situation is not unique.  It has resulted from a well-recognised scam ongoing for at least  the last decade in several European citybreak destinations  popular with  Irish  tourists, particularly Barcelona. The scam involves organised criminal gangs  setting up premium rate toll phone lines for maximum revenue, pickpocketing  tourists and using their simcards to rack up  extortionate roaming charges  by calling their own premium phonelines. UK media reports  have even detailed accounts of thieves  using conference-calling facilities to facilitate simultaneous  calling  of several  scam hotlines  at once in order to more rapidly accrue charges.  A  brief   internet search  demonstrates that  this scam appears to be reaching unprecedented levels. In attempting to extricate themselves from extortionate charges, several customers  with strikingly similar stories have approached various  media outlets in the UK to highlight their situation.  Although I cannot find media coverage of  similar Irish cases,  I surmise that given the  volumes of Irish tourists  heading overseas, we likely have extensive undocumented incidence of this phenomenon.

The typical scenario appears to be that of  a  billpay contract customer in a similar predicament to my own. Having been pickpocketed on holiday they are then  faced by their phone company with liability for excessive  roaming charges on their next bill (frequently in the region of >20K GBP),  stonewalled by both their phone company  and  Consumer Ombudsman,  and  subsequently  referred  without a court ruling to  credit reference agencies and pursued doggedly  for non-payment.

These cases serve as a cautionary tale to highlight  the  ongoing vulnerability of the average Billpay customer using their phone abroad,  even those who have taken apparent steps to keep their phones secure. Most people fail to pin-protect their simcard in addition to their handset, leaving it significantly vulnerable to use by thieves.


Developments in  EU  law has provided some protection to  the consumer with regard to specific costs of various roaming services: The "Eurotariff" for roaming caps the cost of using data  roaming services  worldwide at €50.  In addition there is  a legal requirement for notification of charges by the service provider when crossing a border within the EU.   Problematically however, there is still no specific EU law stating that phone companies must  formally monitor roaming spending or put in place automatic “caps” on suspicious levels of spending. The law has not kept up with the rising criminality targeted at tourists using billpay phones abroad.  UK phone industry Regulator “OfCom”  has  rallied for urgent need for changes to the law  since at least 2012 , instructing  phone companies to  put credit-card-style  automatic “caps” in place.  Most of the major UK phone companies initially signed up to adopt this policy, however these changes have not yet  eventuated.  In Ireland “ComReg” (the equivalent  communications industry  regulatory body)  is also yet to initiate similar changes. The mobile phone industry are clearly not capable of policing themselves in an adequate manner.


Phone companies  such as Meteor  in Ireland continue to emphasise the responsibility of  the  consumer  in  reporting  a stolen billpay phone in a timely manner, boldly proclaiming that contracts entitle the phone company to the full cost of calls after a phone is stolen , whether charges were accrued personally by the customer or not.  On first glance, phone companies might seem to be acting within the law in  blindly placing all liability on the consumer.  From a practical perspective however this seems  grossly unjust, as in most cases by the time  the stolen phone has been reported, thieves have already managed to incur significant roaming charges, with providers insisting the consumer foot the bill.


There is no legal precedent or caselaw on this subject and thus, a significant legal grey zone. Problematically, without  a case precedent, consumer regulatory bodies (ComReg in Ireland) state they cannot recognise that  the behaviour of  phone companies in pursuing payment of  disputed  roaming charges after phone theft is unjust or unlawful.  Recently this legal loophole has generated significant  UK consumer media attention (pioneered most prominently by The Guardian’s  well-respected Finance & Money section) and  consequently scrutiny and commentary from the legal community which demonstrated that if challenged in court, the law would likely support the consumer. Indeed, examining the law more closely, it seems implausible that a phone company would succeed in court in winning a claim  forcing a consumer to pay for charges for calls made after a theft was reported.  


The law requires  that  services should  be delivered with “reasonable care and skill”.  In the case of  mobile phone roaming services this insinuates that a phone company should be expected to spot unusual patterns in usage of the phone and  to instantly block a phone with suspicious levels of roaming activity. When a credit card is stolen,  banks routinely flag suspicious spending in real time  and intervene, blocking the  card, bearing the loss and waiving the liability to the consumer. Mobile phone companies generally do not have proper systems in place  to flag  suspicious activity in real time to block phones after theft to prevent excessive charges. There is usually significant  lag in recognising suspicious patterns of activity and high volume  overseas bill spending often taking days to weeks  to be logged on their systems. This was certainly the case in my scenario- I switched from billpay to Meteor’s  pay as you go service  roughly 36 hours after the theft,  uninformed of the extortionate roaming charges attributed to my account as Meteor’s  system had apparently not yet logged them!  . Failure by the service provider  to do this could  be deemed to contravene the “reasonable care” provision if pursued in a court setting.


The issue of liability in  cases of disputed roaming charges arising from theft overseas has trundled on for almost a decade and no phone company has yet wanted to test its position in court, almost certainly  because companies are obtaining  legal advice that they could not win. It is in companies interests  to avoid a judgement in favour of the consumer as once a precedent has been established companies will legally have no choice but to change their behaviour in pursuing payment.Giving credence to the idea of  the industry’s desire to avoid a landmark precedent,  there have been consistent  UK media reports of phone companies settling out of court.


Several strikingly similar consumer accounts of  near-identical experiences with Vodafone and O2  pertaining to disputed roaming charges arising from theft overseas have recently appeared in the media.  Georgia Harris, a HR worker from Bristol,  Sarah Harvey, an NHS worker from Brighton , and Owain Roberts and Osian Rhys Edwards, teachers from  Wales have all recently had their cases settled out of court after appearing in various UK media outlets drawing scrutiny towards the current situation.


I  read with particular interest  the details of a prominent  2014 case which garnered extensive UK media attention involving young Welsh  Vodafone billpay customer, teacher Mr Osian Rhys Edwards who had been pickpocketed  during  a citybreak in Barcelona. Mr Edwards appeared in an article in The Guardian’s excellent  “Finance & Money” section detailing how, despite Mr Edwards having  reported the  phone stolen immediately after the theft, Vodafone had  demanded payment of roughly GBP 20,000 in outstanding roaming charges and unlawfully threatened  referral of  his case to a credit reference agency for non-payment. Following intense media scrutiny, Vodafone offered to reduce its charges but somewhat incredibly continued to pursue Mr Rhys- Edwards for 10,000 GBP.


Richard Colbey, an eminent Barrister based at Lamb chambers in London  independently contacted Edwards offering  to challenge Vodafone on his behalf  on a  pro bono basis . The case had resonated with him  as he had been faced with similar albeit lesser demands for payment when his daughter’s phone was stolen years prior. He was incredulous when Vodafone did not  completely relent following the Guardians initial coverage of  the story. He  held that the case would have been  clear-cut in favour of Mr Edwards if it had ultimately gone to court. Following the barristers interaction with Vodafone,  the  pursuit for the disputed charges was dropped, with the case ultimately settled out of court.   The reception in the legal community was that the  arguments highlighted by the barrister in Mr Edwards’ case could prove instrumental in winning a landmark judgement against a phone company if a case went to court in the future.  The barrister emphasised the statutorily implied provision of the phone contract that Vodafone would provide its services “with reasonable care”. It  was  highly suspicious that a billpay customer should suddenly call premium rate numbers overseas to the cost  of several thousand pounds- activity spectacularly outside the phones normal use. The phone company had failed to have a system in place recognising this and appropriately blocking the phone, which he held constituted a breach of contract provision for “reasonable care”.


Phone companies are  aware of  the ease with which premium-rate services are increasingly  abused and have protective clauses with premium- rate providers exempting them from paying  when artificially generated calls are made and would likely never have agreed to pay out extortionate amounts incurred by gangs. Short of accusing phone companies of collusion and conspiracy with criminal gangs, the barrister in this case held  that attempting to pass on the roaming charges on to the customer could  be considered an effort to profit from proceeds of criminality, or “unjust enrichment”.  


The barrister emphasised  that given that the phone company had not first gone to court  to obtain a judgment holding Mr Edwards liable, they had thus behaved particularly  unjustly  in attempting to obtain payment by threatening to report him to a credit reference agency.  This  behaviour could  be interpreted  as undue harassment and defamation, akin to my current situation with Meteor.  Phone companies are opportunistically hoping  that the average consumer will simply pay up  for charges when threatened with  referral to a credit reference agency for fear of  a bad credit rating and the future possibility of being unable to obtain a mortgage. It is concerning to note that  in Ireland there is no  clearcut specific system of recourse  via which consumers  can flag  unjust  or defamatory referrals  to credit reference agencies by large corporations. These cases highlight the actions of large companies in  using significant intimidation to force consumers to pay sums which they have no contractual or legal entitlement to.  Ultimately until a clear precedent is established  forcing the behaviour of the mobile phone industry to change,   the onslaught of  similar disputes  seems likely to continue.  Until then, the only sure-fire way to protect oneself from unwanted overseas roaming charges on a billpay phone seems to be to “pin-protect” the simcard in addition to the handset, or further still,  completely forgo the  potential liability involved  with billpay phones and  simply to use a ”pay as you go” sim when abroad.  In the meantime, the cases of myself  and the other customers in the UK media should remain a  stark cautionary tale to the average  Irish customer when using a billpay phone abroad.



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