iPhone fraud gang collared by cops

A gang of nine people has been arrested and accused of carrying out a sophisticated scam involving up to 1,000 stolen iPhones.

The East London gang, all of whom are of Pakistani origin, used illegally-obtained iPhones to rack up enormous bills using premium rate phone lines - some costing up to £10 per minute - which they had set up themselves or with the help of criminal colleagues according to a report in the Telegraph.

The gang was able to rake in millions because the airtime provider involved settles costs as soon as a call is made to a premium rate number rather than waiting until the user pays the bill.

The handsets were purchased using stolen credit cards and identities. They were unlocked and sold on for up to £450 each, once the original sim cards had been rumbled. Iphones involved in the scam have turned up as far afield as the Middle East and Vietnam.

Police were called in after O2 spotted a number of new accounts spiralling out of control. More than £1.2 million was spent using the stolen handsets in a single month this year.

Raids on addresses in Forest Gate and Southall in London, Southend, Walsall, central Birmingham and Middlesbrough turned up hundreds of sim cards, 30 iPhones still in their boxes, 20 stolen bank cards and a number of fake passports.