Circles Australia, operating under the name Circles.Life, has been fined $413,160 by the Australian Communications and Media Authority (ACMA) for failing to adhere to customer identity verification rules. The breaches occurred 26 times over January and February 2024, involving the transfer of mobile phone numbers without adequate identity verification.

The contraventions allowed scammers to exploit the system, using stolen numbers to access bank accounts. This resulted in consumer losses amounting to at least $45,000. This incident marks the second breach by Circles.Life within three years. In August 2022, the company faced a $199,800 penalty for similar violations.

The Telecommunications (Mobile Number Pre-Porting Additional Identity Verification) Industry Standard 2020 mandates that telecommunications companies must verify customer identities before processing mobile number transfers. The recent breaches were attributed to customer service agents from a third-party company failing to follow the prescribed identity verification procedures. Despite outsourcing these services, Circles.Life remains accountable for compliance with the verification requirements.

Authority Member Samantha Yorke said: “This kind of fraud can also lead to ongoing emotional impacts and stress as people have to recover their digital identities…It is simply unacceptable that Circles.Life failed a second time to follow the identity checking rules that prevent criminals from committing mobile number fraud.

“Regardless of these arrangements, Circles.Life was ultimately responsible for complying with the requirements. Telcos should be aware they cannot outsource their legal obligations to protect Australian consumers.”

The $413,160 penalty imposed on Circles.Life is the largest issued by ACMA for violations of these specific rules. In response to the breaches, ACMA has accepted a court-enforceable undertaking from Circles.Life to review its compliance with identity verification standards. Additionally, Circles.Life has voluntarily committed to contacting all affected consumers with an offer of compensation.

Circles.Life plans to cease its operations in Australia, transferring its customer base to Amaysim. However, the enforceable undertaking will remain in effect should the company decide to re-enter the Australian market.

Consumers who suspect they have fallen victim to a phone scam are advised to contact their telecommunications provider and financial institution immediately. Support services such as IDCARE, Lifeline, and Beyond Blue are available to assist those affected by identity theft and scams.