Since discovering that Carrier IQ could potentially track keystrokes on smart phones in the U.S., consumers are asking one question: Is my phone being hacked? The answer, most probably, is yes.

Manufacturing companies have denied pre-installing the carrier onto devices, but it turns out network carriers can choose to customize their phones with it and use it as an analytical tool that they claim does not breech user privacy.

Do we believe them?

Sprint's spokeswoman, Stephanie Virge, revealed that the network carrier uses Carrier IQ to analyze network performance and identify where the service can be improved.

We also use the data to understand device performance so we can figure out when issues are occurring. We collect enough information to understand the customer experience with devices on our network and how to address any connection problems, but we do not and cannot look at the contents of messages, photos, videos, etc., using this tool. The information collected is not sold and we don't provide a direct feed of this data to anyone outside of Sprint, she said in a statement.

AT&T has also admitted to using Carrier IQ but issued a statement saying their use of it is in line with their privacy policy. It improves wireless network and service performance, we do not use it to track personal data, they said in a statement. T-Mobile said the same thing, but Verizon claims that it does not use Carrier IQ, or any other software that has similar capabilities.

Although the carriers claim they do not use any personal information, it appears that the software bears capabilities that can log sensitive information and potentially transmit it.

Sen. Franken called on Carrier IQ's CEO, Larry Lenhart, to explain exactly what information the software records, whether that information is transmitted to Carrier IQ or to other companies, and whether the information is shared with a third party.

Carrier IQ told AllThings D that the software has the ability to receive a great amount of information but it does not log keystrokes and it is not being used to gather intelligence about the phone's users. Even if the company claims not to use personal information, the software's capabilities in gathering such information could be in breach of federal wiretap laws, according to researchers who spoke to MSNBC.

If Carrier IQ 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, Paul Ohm, a former Justice Department prosecutor told Forbes.

Meanwhile, Google Android and RIM for BlackBerry, deny having any involvement with Carrier IQ.

RIM does not pre-install the Carrier IQ app on BlackBerry smartphones or authorize its carrier partners to install the Carrier IQ app before sales or distribution, the company said in a statement. RIM did not deny the possibility that the software could still live on BlackBerry devices.

If the Carrier IQ application is present on a BlackBerry smartphone, it does not mean that the Carrier IQ application has 'hacked' the BlackBerry platform. It means that either the BlackBerry smartphone user or the user's BlackBerry Enterprise Server admin explicitly installed the application and authorized it to run, BlackBerry Development Advisor, Mark Sohm, told Allthings D.

It appears that the only device that is completely safe from Carrier IQ is the latest iPhone 4S. Apple issued a statement saying that the company stopped supporting the software with IOS 5 and it plans to remove the software from future Apple software updates.