Cheap cell phone too good to be true, comes with built-in spyware

BERLIN -- A cheap brand of Chinese-made smartphones carried by major online retailers comes preinstalled with espionage software, a German security firm said Tuesday.

G Data Software said it found malicious code hidden deep in the propriety software of the Star N9500 when it ordered the handset from a website late last month. The find is the latest in a series of incidents where smartphones have appeared preloaded with malicious software.

G Data spokesman Thorsten Urbanski said his firm bought the phone after getting complaints about it from several customers. He said his team spent more than a week trying to trace the handset's maker without success.

"The manufacturer is not mentioned," he said. "Not in the phone, not in the documentation, nothing else."

The Associated Press found the phone for sale on several major retail websites, offered by an array of companies listed in Shenzhen, in southern China. It could not immediately find a reference to the phone's manufacturer.

G Data said the spyware it found on the N9500 could allow a hacker to steal personal data, place rogue calls, or turn on the phone's camera and microphone. G Data said the stolen information was sent to a server in China.

Bjoern Rupp, chief executive of the Berlin-based mobile security consultancy firm GSMK, said such cases are more common than people think. Last fall, German cellphone service provider E-Plus found malicious software on some handsets delivered to customers of its Base brand.

"We have to assume that such incidents will increasingly occur, for different commercial and other reasons," said Rupp.