Also of concern for the retailer is the claim that the naked woman in the images was sales person who sold the phone.

The images include a naked woman naked from the waist down lying on a bed performing a sex act, a man holding his penis and consecutive shots of the woman in her bra and pulling her pants down.

The female customer a Cairns University student immediately contacted her local newspaper the Cairns Post according to Dick Smith employees and as of today Dick Smith claim that they have not seen the images on the phone.

The story that was first reported in the Cairns Post claimed that the woman said  "It's sickening to think I've been using this phone near my face when it was used to take all of these photos," she said.

"I'm not disgusted by what she did, what people do in their own homes is their business. "But I'm disgusted that it was left on the shelf to be sold."

The store sold her a display phone because it was the last one in stock, but she later contacted the store to complain that it was faulty because she could barely hear callers talking.

She then accessed the phone's menu and discovered 49 images, including the female staff member in her Dick Smith Electronic uniform outside the store, two other people, and what is believed to be various interior shots of a hotel room.