UK telcos step up efforts to combat ‘epidemic’ of handset fraud
Surge in scams forces VodafoneThree, EE and Virgin Media O2 to tighten controls on mobile phone purchases
An “epidemic” of mobile phone fraud is costing UK telecoms companies potentially hundreds of millions of pounds a year as criminal gangs mass-order handsets only to vanish before paying the bill.
The increasing prevalence of handset fraud, which is estimated to cost the UK telecoms industry more than £200mn each year, has forced telcos such as Virgin Media O2, EE and VodafoneThree to crack down on who they allow to purchase devices. The City of London Police has intensified its efforts to catch the gangs behind the practice.
Instances of the most prevalent scam — known as “mobile dealer” fraud — jumped by 650 per cent to more than 16,000 in the first half of 2025, according to fraud prevention service Cifas.
It involves criminals obtaining customers’ login details on the dark web and then calling them, posing as an employee of their telecoms provider, to offer a seemingly great deal on a new phone.
Once the customer consents, the criminal logs into their account and places an order for a different phone to be sent to them. When the customer flags the issue, the criminal instructs them to send the phone to another address, where they collect it and resell it on the black market.
Murray Mackenzie, director of fraud for Virgin Media O2, described the issue as an “epidemic” that had been a “growing threat” for several years.
“The scale and the appetite of fraudsters is continuous,” he said. “The reality here . . . is one where they’ve got a high incentive: a mobile phone holds its resale value”.
A report by Cifas found there were 26,000 reported telecom account takeovers — where scammers break into customers’ accounts to make purchases — in the UK between January and June this year. That was up from 15,000 over the same period last year.
Telcos have tightened controls on who can purchase devices by tracking repeat orders and staggering stock releases.
Mackenzie said the perpetrators were usually connected to criminal networks in south-east Asia, where the stolen phones ended up, and that the company was working with the Home Office to prevent phones being resold in the region.
Telecoms fraud takes other forms, too. In some instances, criminals create accounts under a false identity to order phones on a 12 or 24-month payment plan. Once the phone is delivered, they fail to make the payments.
Another scam involves fraudsters initially maintaining payments under a false identity, before abruptly acquiring as many mobile devices and taking on as much credit as possible before defaulting on their debts.
The City of London Police, the police body responsible for fraud and economic crimes, is intensifying its efforts to clamp down on telecoms fraud, codenamed Operation Carrow.
Detective Inspector Rick Nolan said the operation had resulted in a “significant number” of arrests and the seizure of 1,500 fraudulently purchased devices this year. A person familiar with the process said convictions were likely later in 2025.
Andrew Cole, executive chair of Glow Services, which helps UK telcos tighten their financial controls, said the company had tracked cases where more than 2,000 phones had been ordered from a single address in one week.
“You see these people do thousands of applications a week,” he said. “They have fraudulent bank accounts; they use different telephone numbers; they will use other people’s ID to do credit checks . . . they’re very sophisticated”.
