The latest Carrier IQ shenanigans are turning out to be much more of a mess than was previously thought. The key-logging software that has been embedded into millions of phones (now estimated at 141,297,565) is pretty much capable of knowing everything that goes on in your smartphone.

If you happen to have private or sensitive data on your phone, it has all been available to Carrier IQ and also whomever they choose to share it with (and it’s hard to imagine that they’re not).

This kind of privacy infringement has a tendency to make people angry and demand justice, and rightly so.

That’s not just creepy, says Paul Ohm, a former Justice Department prosecutor and law professor at the University of Colorado Law School. He thinks it’s also likely grounds for a class action lawsuit based on a federal wiretapping law.

“If CarrierIQ has gotten the handset manufactures to install secret software that records keystrokes intended for text messaging and the Internet and are sending some of that information back somewhere, this is very likely a federal wiretap.” he says. “And that gives the people wiretapped the right to sue and provides for significant monetary damages.” - Forbes

“Creepy” is a very good word to sum up the whole situation. The word “wiretapping” is also starting to surface as lawmakers have now filed class action lawsuits against not only Carrier IQ, but also HTC and Samsung – the phones that are mostly engrained into this scandal.

Apparently the newest version of Apple’s iOS 5 does not contain Carrier IQ, but older versions do indeed still have it. Apple has not cut all ties with Carrier IQ, so maybe they got lucky on this one. Here’s their official statement:

We stopped supporting Carrier IQ with iOS 5 in most of our products and will remove it completely in a future software update. – AllThingsD.com

To remove Carrier IQ from your iPhone, check out this guide over at Mashable.

I don’t care if they say it’s not on the newest iPhone, I still went ahead and disabled the setting in my iPhone 4S. Call me crazy, but I don’t trust that any mobile provider has our privacy’s best interest in mind. There’s not much doubt in my mind that the only thing they’re interested in is giving off the impression that they care about privacy. That way they can avoid legal repercussions, and also save their reputations.

Removing Carrier EQ from an Android device is a bit more tricky. Just discovering whether or not you have it on your phone requires you to install an app. You can find the app over here: Voodoo Carrier IQ Detector

However, this doesn’t actually remove it from your phone, it simply let you know that you officially have to worry about it. To remove it, you must have a rooted phone. This complicates things, since if you root your phone it automatically voids the warranty, and as far as I know you can’t un-root your phone.

There will most likely be a more complete method for removing without rooting in the future, but for now, if you already have a rooted phone or don’t mind rooting it, there’s an app that will supposedly remove it for you over here: Logging Testapp Pro

More updates to come…