ispyPhone ... Is your smartphone watching you? <I>Graphic: Liam Phillips</i>

ispyPhone ... Is your smartphone watching you? Graphic: Liam Phillips

Australian security experts, consumer advocates and privacy campaigners have sounded the alarm over the hundreds of thousands of free smartphone applications that spy on their users.

Lookout, a smartphone security firm based in San Francisco, scanned nearly 300,000 free applications for Apple's iPhone and phones built around Google's Android software. It found that many of them secretly pull sensitive data off users' phones and ship them off to third parties without notification.

That's a major concern that has been bubbling up in privacy and security circles.