TELSTRA is under fire for a serious privacy breach after a Melbourne man's personal contact list ended up on another man's brand new iPhone.

Nathan Fallon was given an iPhone as a gift two days before Christmas and was shocked to find it already contained 182 contact names and numbers.

Staff at the Watergardens T(life) store, from where the phone was bought, advised him to immediately delete the contacts, but he called the number marked "home" in the phone.

The number belonged to Stan Soutaris, who lived in a neighbouring suburb, and was distressed to think his contact list may have been distributed to other iPhone buyers.

"If the supposed premier carrier is doing this to people, what are smaller, dodgy ones doing to us?" Mr Soutaris said.

"When Nathan first contacted me, I thought he was a crook. Imagine what could have happened if he hadn't been so honest with this?"

Telstra has apologised for the "human error", but Mr Soutaris said he was sickened to think any of his details might have already ended up in the hand-sets of other iPhone users, and he had been given no assurances that the retail outlet had taken steps to address this.

He believed the list may have leaked when he was sorting out a download problem with his phone at the same T(life) store where Mr Fallon's was bought.

He said his phone contents were downloaded on to a laptop as backup in case the information was accidentally deleted from his phone.

"But how that information got on to my new iPhone is a mystery," said Mr Fallon, who runs a business that ferries people home from pubs and parties if they're unexpectedly over .05.

"I have the names and numbers many high-profile people - clients from around Melbourne - and it would be a disaster if the same thing had happened to my contact list."

Theirs is one of a growing number of privacy grievances coinciding with the influx in smart-phone users.

The Herald Sun has heard of at least three other cases relating to iPhone privacy breaches.

The Telecommunications Industry Ombudsman has reported complaints about privacy-related issues rose from 2300 in 2006-07 to 4900 in 2008-09, though there was a drop in the past six months.

A Telstra spokesperson said it had strict processes in place, but the problem appeared to be caused by human error.

Originally published as Fury over phone privacy breach