Xiaomi phone news are starting to circulate in the interwebs as of late.

The Chinese mobile phone company has been on the spotlight because of its noteworthy smartphones that sell like pancakes. The Mi3 for instance was sold out within minutes after its release.

But its biggest claim to fame to date is dethroning Samsung as the no.1 mobile phone brand in China. Samsung has been the top choice amongst the Chinese, until Xiaomi phones came into the picture.

However, new reports may put the mobile phone giant under a different light. While its phones are known for being reasonably priced yet packed with top-notch specs and features, it seems that its MIUI OS could be their phones' downfall.

According to The Times of India, Xiaomi phones have reportedly been sending user data to an unknown remote server. Security software company F-Secure was the first to make the allegations after testing the Xiaomi Redmi 1S.

"At first, F-Secure did not configure an Mi Cloud (Xiaomi's equivalent of Apple's iCloud that stores user data) account and simply inserted a sim card, connected the phone to Wi-Fi, turned on GPS, added a contact and made and received a call and exchanged messages," the article explained.

"The company found that the phone number of contacts added to the phone book and from SMS messages received were also forwarded. The phone follows a similar pattern even when one configures an Mi Cloud account."

Xiaomi VP Hugo Barra had previously responded to the allegations. Barra through an FAQ on his Google+ page explained that Xiaomi's MIUI OS does not share any private user data without any consent, and only backs data up when the Mi Cloud is activated.

However, Barra's statement directly contradicts Xiaomi's privacy policy which says:

"When you use and activate Xiaomi mobile devices for the first time, the mobile user identification information, mobile device unique identification and the location information of your device will be sent to Xiaomi."

"When you use Xiaomi products to share information with your family and friends, to send messages and products or invite other person through Xiaomi BBS, we(Xiaomi) will collect the information which you provide and is relevant with such people, for example name, mail address and telephone number and so on."

What do you think? Are Xiaomi phones a threat to its users' privacy? Sound off below!