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Vodafone hit by ACMA after IT update allowed new users to skip legal obligations

For twelve months from January 2015, new Vodafone Australia prepaid users were able to claim the telco had verified their identities when it had not.

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Vodafone Australia has been hit with an enforceable undertaking from the Australian Communications and Media Authority (ACMA) after more than 1,000 customers failed to be verified by the telco before activating their prepaid mobile service.

According to ACMA, the users were able to avoid legal obligations thanks to an update to Vodafone's online activation site that allowed users to self-select that they had been verified, without the telco checking this had occurred.

"Verifying the identity of prepaid mobile customers helps law enforcement and national security agencies obtain accurate information about the identity of customers for the purposes of their investigations," ACMA acting chair James Cameron said.

"Telcos must check that changes to their IT systems don't run the risk of contravening legal requirements."

As a result of the breaches, for the next 24 months Vodafone will need to conduct half-yearly compliance audits and report to ACMA, will have to conduct a review and risk assessment of any future changes to its systems and processes, and put staff through training programs.

The enforceable undertaking continues a run of outs for Australia's third mobile operator.

Last month, the Australian Federal Court dismissed Vodafone's attempt to have the Australian Competition and Consumer Commission (ACCC) draft decision-making process on wholesale mobile domestic roaming deemed as flawed.

Vodafone had launched judicial review proceedings in June against the ACCC, saying its inquiry process was "flawed" as it did not properly define eligible services, leaving the matter too "vague".

During the hearing in September, Vodafone counsel Noel Hutley SC argued that the ACCC had failed to conduct the inquiry lawfully, and that by publishing its draft decision and threatening to publish its final decision, it is failing to act in accordance with the law.

The ACCC in October published its final decision not to declare wholesale mobile domestic roaming.

The ACCC report stated that a declaration of wholesale mobile domestic roaming, which would allow Vodafone to piggyback off Telstra's mobile infrastructure instead of building out its own, "would not promote competition in the retail mobile services market to a significant extent".

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