The UK mobile industry is losing up to £140 million a year on premium rate fraud, according to BillingScore. BillingScore offers an anti-fraud system that monitors premium rate transactions in real time.

It says network operators take around 30% from operator billing charges to cover fraud and bad debt, which means the cost of fraud affects all the players in the mobile industry, including SMS wholesalers, aggregators, content providers, retailers and consumers.

Teresa Cottam of independent telecoms and IT analyst company Telesperience said “Premium rate fraudsters in the UK are cheating the mobile industry out of more than the biggest ever Euromillions lottery win - every single year!  We need to stop this money going into their back pockets, and use it instead to improve mobile networks or lower mobile bills for customers. Everyone in the mobile industry knows that fraud, bad debt and other types of revenue loss are a major issue – yet hardly anyone talks about it. The scale of the problem is hidden and the cost built into existing business models. The mobile sector simply cannot afford to continue haemorrhaging money in this way; nor can it keep hitting honest customers in the pocket in the form of higher charges, simply because it has failed to address the losses.”

Growth in operator billing - resulting from the increasing popularity of app stores, in-app payments, NFC and mobile commerce - is expected to result in increased vulnerability to mobile payment fraud.

BillingScore reckons that around £1 in every £5 spent via mobile is fraudulent activity, with the mobile industry’s share of the premium rate sector currently valued in the region of £700 million.