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A cloud-based enterprise messaging platform was found guilty of breaching the rules established by the Australian Communications and Media Authority (ACMA).
In July 2022, ACMA imposed new guidelines and rules for telcos to check and filter SMS rigorously. This move ensured that telecommunication companies could identify, trace, and block SMS scams.
However, Modica Group is the first to break the rules after blocking around 90 million messages in the first six months of the rule’s effectiveness. They need to filter customers’ messages as they allow them to send SMS through text-based sender identification.
According to ACMA Chair Nerida O’Loughlin, the measures were put in place to cut down on frauds that use sender IDs to impersonate legitimate businesses like banking institutions, government agencies, and toll companies.
“This is a widely used trick used by scammers to gain consumer trust,” Ms O’Loughlin said.
“Sender IDs generally display as a name on mobile phones, and impersonating well-known brands allows the texts to slip into legitimate message streams from the brands.”
After a series of investigations, it was later found that Modica does not have some Standard Operating Procedures to ensure that their customers have legitimate profiles. They need to find a way to guarantee that each of its clients presents documentation proving their right to use text-based sender IDs.
ACMA’s rules required telcos to report the number of scam SMS it had blocked, yet Modica still needed to have a record from July to September 2022. “While we did not find evidence any scammers had used the vulnerability created by Modica, its failure to have adequate processes in place put people at risk of receiving SMS scams,” said Ms O’Loughlin.
“Uniform action is required across the sector as our experience has shown scammers will target the weakest link in telco systems to reach Australians.”
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