A Brisbane man has been hit with a $2 million fine by the Federal Court for his role in a complex scam in which fake profiles on dating sites were used to harvest mobile numbers for a premium SMS service.
Former porn site operator Scott Gregory Phillips was the final defendant to face court for his involvement with SMS operator Safedivert, which has been the subject of a long investigation by the Australian Communications and Media Authority.
Seven other people were fined a total of $22.5 million over the complex scam last year.
Under the scam, which ran over 54 days between December 2005 and April 9, 2006, Phillips and the other offenders hired backpackers to pose for photographs for fake profiles on dating sites. The profiles were then used to get the mobile phone numbers of other dating site users.
The victims’ phone numbers then received messages from the owners of the fake dating site profiles, pretending to invite the victims to chat and, in the words of ACMA, “form a relationship”.
But the messages, which came from the Safedivert system, cost the victims $5 per message.
ACMA estimates $4 million was lost by victims lured in by the fake dating profiles.
Justice John Logan imposed a $2 million penalty in the Federal Court in Brisbane over the breaches of the Spam Act and the Trade Practices Act.
Logan said the scheme netted $140,000 in profit during Phillips’ involvement.
“It was a systematic and studied deception of those who used internet dating websites; the end to which that deception directed was the (pursuit) of profit,” he said.
“The conduct was undoubtedly deliberate… Mr Phillips’ involvement in the deception was at the most senior level.”
ACMA chief Chris Chapman described the fine as “encouraging” as it underlined how seriously spam offences were taken.
“In cases such as this where the conduct was calculated, deceptive and had a detrimental effect on Australian phone users, the ACMA will not hesitate to use every available avenue to protect the consumer,’ Chapman said.
Phillips has 28 days to pay the penalty. ACMA was awarded costs, but they are yet to be fixed.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
