Phone fraud - AbsoluteAstronomy.com

Whether in the form of the consumer attempting to defraud the telephone company

Telephone company

A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...

, the telephone company attempting to defraud the consumer, or a third party attempting to defraud either of them, fraud

Fraud

In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

has been a part of the telephone

Telephone

The telephone , colloquially referred to as a phone, is a telecommunications device that transmits and receives sounds, usually the human voice. Telephones are a point-to-point communication system whose most basic function is to allow two people separated by large distances to talk to each other...

system almost from the beginning.

A carrier's bottom line is significantly impacted by billing fraud.

Frauds against users by phone companies

Cramming
Cramming (fraud)
Cramming is a form of fraud in which small charges are added to a bill by a third party without the subscriber's consent or disclosure. These may be disguised as a tax or some other common fee, and may be several dollars or even just a few cents. The crammer's intent is that the subscriber will...

is the addition of charges to a subscriber's telephone bill for services which were neither ordered nor desired by the client, or for fees for calls or services that were not properly disclosed to the consumer. These charges are often assessed by dishonest third-party suppliers of data and communication service that phone companies are required, by law, to allow the third-party to place on the bill.
Slamming
Telephone slamming
Telephone slamming is an illegal telecommunications practice, in which a subscriber's telephone service is changed without their consent. Slamming became a more visible issue after the deregulation of the telecommunications industry in the mid-1980s, especially after several brutal price wars...

is any fraudulent, unauthorized change to the default long-distance/Local carrier or DSL internet service selection for a subscriber's line, most often made by dishonest vendors desirous to steal business from competing service providers. Main article: Telephone slamming
Telephone slamming
Telephone slamming is an illegal telecommunications practice, in which a subscriber's telephone service is changed without their consent. Slamming became a more visible issue after the deregulation of the telecommunications industry in the mid-1980s, especially after several brutal price wars...

.

Fraud against customers by third parties

PBX dial through can be used fraudulently by placing a call to a business and then requesting to be transferred to "9-0" or some other outside toll number. (9 is normally an outside line and 0 then connects to the utility's operator) The call appears to originate from the business (instead of the original fraudulent caller) and appears on the company's phone bill. Trickery (such as impersonation of installers and telco personnel "testing the system") or bribery and collusion with dishonest employees inside the firm may be used to gain access.
Autodialers may be used for a number of dishonest purposes, including telemarketing fraud
Telemarketing fraud
Telemarketing fraud is fraudulent selling conducted over the phone. It most often targets the poor and elderly. Common types include:*Advance fee fraud...

or even as War dialing
War dialing
War dialing or wardialing is a technique of using a modem to automatically scan a list of telephone numbers, usually dialing every number in a local area code to search for computers, Bulletin board systems and fax machines...

. War dialers take their name from a scene in the early-1980's movie WarGames
WarGames
WarGames is a 1983 American Cold War suspense/science-fiction film written by Lawrence Lasker and Walter F. Parkes and directed by John Badham. The film stars Matthew Broderick and Ally Sheedy....

in which a 'cracker' programs a home computer
Home computer
Home computers were a class of microcomputers entering the market in 1977, and becoming increasingly common during the 1980s. They were marketed to consumers as affordable and accessible computers that, for the first time, were intended for the use of a single nontechnical user...

to dial every number in an exchange, searching for lines with auto-answer data modem
Modem
A modem is a device that modulates an analog carrier signal to encode digital information, and also demodulates such a carrier signal to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data...

s. Sequential dialing is easy to detect, pseudo-random dialing is not. One more recent variant involves claiming to be a customer-owned coin-operated telephone (COCOT)
Payphone
A payphone or pay phone is a public telephone, often located in a phone booth or a privacy hood, with pre-payment by inserting money , a credit or debit card, or a telephone card....

vendor, connecting an autodialer to what should have been a payphone line, dialing an assorted series of toll-free "wrong numbers" (such as +1-800 in US, which effectively reverses the charges) and then demanding that the called parties reimburse the fraudulent COCOT provider for the cost of "calls received from a payphone".
Autodialers are also used to make many short duration calls, mainly to mobiles, leaving a missed call number which is either premium rate or contains advertising messages. Knowns as Wangiri
Wangiri
Wangiri is a Phone fraud that originated in Japan. The scam involves a computer using hundreds of phone lines to dial mobile phones numbers at random. The numbers appear as missed calls on the recipients mobile. Believing a legitimate call was cut off, or simply curious, users are enticed to...

from Japan where it originated.
Dialer programs containing malware
Malware
Malware, short for malicious software, consists of programming that is designed to disrupt or deny operation, gather information that leads to loss of privacy or exploitation, or gain unauthorized access to system resources, or that otherwise exhibits abusive behavior...

or malicious code have been used to cause personal computers to disconnect from an existing legitimate local provider and instead dial into a premium (usually overseas) number. The first of these used a Moldova
Moldova
Moldova , officially the Republic of Moldova is a landlocked state in Eastern Europe, located between Romania to the West and Ukraine to the North, East and South. It declared itself an independent state with the same boundaries as the preceding Moldavian Soviet Socialist Republic in 1991, as part...

n phone number.
Pre-pay telephone card
Telephone card
A telephone card, calling card or phone card for short, is a small plastic card, sized and shaped like a credit card, used to pay for telephone services. It is not necessary to have the physical card except with a stored-value system; knowledge of the access telephone number to dial and the PIN is...

s and "calling cards" are also very vulnerable to fraudulent use; these cards contain a number or passcode which can be dialed in order to bill worldwide toll calls to the card. Anyone who obtains the passcode can dishonestly misuse it to make or to resell toll calls.
809 scams take their name from the former +1 (809) area code which used to cover most of the Caribbean
Caribbean
The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...

nations (it has since been split into multiple new area codes, adding to the confusion). The numbers *look* like Canadian or US telephone numbers but turn out to be costly, overpriced international calls. Entire Caribbean 'phone exchanges (such as +1-876-HOT-...) numbers in Jamaica
Jamaica
Jamaica is an island nation of the Greater Antilles, in length, up to in width and 10,990 square kilometres in area. It is situated in the Caribbean Sea, about south of Cuba, and west of Hispaniola, the island harbouring the nation-states Haiti and the Dominican Republic...

, plus numbers in Antigua
Antigua
Antigua , also known as Waladli, is an island in the West Indies, in the Leeward Islands in the Caribbean region, the main island of the country of Antigua and Barbuda. Antigua means "ancient" in Spanish and was named by Christopher Columbus after an icon in Seville Cathedral, Santa Maria de la...

, Montserrat
Montserrat
Montserrat is a British overseas territory located in the Leeward Islands, part of the chain of islands called the Lesser Antilles in the West Indies. This island measures approximately long and wide, giving of coastline...

and a number of other Caribbean or overseas countries) are used to bypass consumer protection laws which govern premium numbers and phone sex
Phone sex
Phone sex is a type of virtual sex that refers to sexually explicit conversation between or other persons via telephone, especially when at least one of the participants masturbates or engages in sexual fantasy...

operations such as +1-900 or 976 services in the victim's home country. Other variants on this scheme involve leaving messages on pagers or making bogus claims of being a relative in a family emergency to trick users into calling the foreign numbers, then attempting to keep the victim on the line as long as possible in order to incur the cost of an expensive foreign call.
The 10xxx or 1010xxx codes used to select an alternate long-distance carrier on a per-call basis were also widely misused by phone sex scammers and spammers in the early days of competitive long distance; the phone-sex operations would misrepresent themselves as alternate long-distance carriers to evade consumer protection
Consumer protection
Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...

measures which prevent US 'phone subscribers from losing local or long-distance service due to calls to +1-900 or 976 premium numbers. This practice has largely been replaced by the misuse of numbers in former +1-809 countries or other overseas numbers as cash-strapped governments in many poorer nations are willing to condone the practice.
Telemarketing fraud
Telemarketing fraud
Telemarketing fraud is fraudulent selling conducted over the phone. It most often targets the poor and elderly. Common types include:*Advance fee fraud...

takes a number of forms; much like mail fraud, solicitations for the sale of goods or investments which are never delivered or worthless and requests for donations to bogus unregistered charities are not uncommon. Callers often prey upon sick
Illness
Illness is a state of poor health. Illness is sometimes considered another word for disease. Others maintain that fine distinctions exist...

and elderly persons; scams in which a caller attempts to obtain banking or credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...

information also frequently occur. One other variant involves calling a number of business offices, asking for model numbers of various pieces of office equipment in use (such as photocopiers) and then sending unsolicited shipments of supplies for the machines then billing the victims at artificially inflated prices.
Verizon, at the customer's request, will put a Cramming Block on the customer's account, that prevents third parties from adding charges.

Fraud with selling phones

Fake webpages can easily be created by anyone who wishes to do so, so when 'tracking' your parcel, make sure it's a very well known and trusted courier.
Often what happens is if they are in a different time zone they will say that according to their company, time zone, courier service etc. it was late, so make sure you establish an exact time for any and all payments, both in your and their timezones.
Sometimes if they get a chance they will say that because you were late with a payment the original courier service refused to ship your package and they now need to use a "Private"&"Reliable" courier service so there will be more fees to be paid.
Settling for less, when the people you are trading with accept a smaller amount than what was previously said to be needed for an extra payment such as switching couriers, late fees, extra products etc.
When paying for your item(s), do not use payment methods such as western union, it is highly likely to be a scam if your supplier insists on using it, excuses may even be as absurd as the other method of payment is reserved for larger clients. With things such as western union you can not get your money back.
Going the extra mile, they might mention how they have large clients that order thousands of their items, but they put so much effort into your tiny order, now this could be legitimate, but more likely to be a scam.
"I'm insulted", in the scenario that you agreed to pay some remaining fees (that were added on for a number of possible reasons) after you receive your item(s), you might be set up to agree on receiving it a certain time, the item(s) don't get there in time and you might be inclined to ask if it is a scam. At which point the people you are dealing with will take it to serious offence and will 'put your delivery on hold' until you pay the remaining fees.
"Here's the proof we are a real company", if they send you a link to a web-page where you can search for them, don't trust it, remember that anyone can create a web-page at anytime. If you can't find proof of them without their help, tread lightly.

Fraud by phone companies against one another

Interconnect fraud involves the falsification of records by telephone carriers in order to deliberately miscalculate the money owed by one telephone network to another. This affects calls originating on one network but carried by another at some point between source and destination.
Refiling is a form of interconnect fraud in which one carrier tampers with CID (caller-ID) or ANI data to falsify the number from which a call originated before handing the call off to a competitor. Refiling and interconnect fraud briefly made headlines in the aftermath of the Worldcom financial troubles; the refiling scheme is based on a quirk in the system by which telcos bill each other - two calls to the same place may incur different costs because of differing displayed origin. A common calculation of payments between telcos calculates the percentage of the total distance over which each telco has carried one call to determine division of toll revenues for that call; refiling distorts data required to make these calculations.

Fraud against the phone company by users

Subscription fraud: for example, signing up with a bogus name, or no intention to pay

Frauds against the phone company by third parties

Phreaking
Phreaking
Phreaking is a slang term coined to describe the activity of a culture of people who study, experiment with, or explore telecommunication systems, such as equipment and systems connected to public telephone networks. As telephone networks have become computerized, phreaking has become closely...

involves obtaining knowledge of how the telephone network operates, which can be used (but isn't always) to place unauthorised calls. The history of phone phreaking shows that many 'phreaks' used their vast knowledge of the network to help telephone companies. There are, however, many phreaks that use their knowledge to exploit the network for personal gain, even today. In some cases social engineering has been used to trick telco
Telephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...

employees into releasing technical information. Early examples of phreaking involved generation of various control tones, such as a 2600 hertz blue box tone to release a long-distance trunk for immediate re-use or the red box tones which simulate coins being inserted into a payphone
Payphone
A payphone or pay phone is a public telephone, often located in a phone booth or a privacy hood, with pre-payment by inserting money , a credit or debit card, or a telephone card....

. These exploits no longer work in many areas of the telephone network due to widespread use of digital switching systems and out-of-band signaling. There are, however, many areas of the world where these control tones are still used and this kind of fraud is still continuing to happen.
A more high-tech version of the above is switch reprogramming, where unauthorized "back door" access to the phone company's network or billing system is used to allow free telephony. This is then sometimes resold by the 'crackers' to other customers.
Payphone
Payphone
A payphone or pay phone is a public telephone, often located in a phone booth or a privacy hood, with pre-payment by inserting money , a credit or debit card, or a telephone card....

s have also been misused to receive fraudulent collect calls; most carriers have turned off the feature of accepting incoming calls or have muted the payphones internal ringing mechanism for this very reason.
Cloning (telephony) has been used as a means of copying both the electronic serial number
Electronic Serial Number
Electronic serial numbers were created by the U.S. Federal Communications Commission to uniquely identify mobile devices, from the days of AMPS in the United States from the early 1980s. The administrative role was taken over by the Telecommunications Industry Association in 1997 and is still...

and the telephone number of another subscriber's 'phone to a second (cloned) 'phone. Airtime charges for outbound calls are then mis-billed to the victim's cellular 'phone account instead of the perpetrator's. Cordless phone
Cordless telephone
A cordless telephone or portable telephone is a telephone with a wireless handset that communicates via radio waves with a base station connected to a fixed telephone line, usually within a limited range of its base station...

s are often even less secure than cellphones, though there are a number of security issues currently affecting cellular phones. There are a number of other privacy
Privacy
Privacy is the ability of an individual or group to seclude themselves or information about themselves and thereby reveal themselves selectively...

concerns with mobile and cordless 'phones; a scanner radio
Scanner (radio)
A scanner is a radio receiver that can automatically tune, or scan, two or more discrete frequencies, stopping when it finds a signal on one of them and then continuing to scan other frequencies when the initial transmission ceases....

may intercept analogue conversations in progress.

Frauds against the phone company by phone company employees

External links

State-by-State Comparison of Cramming Laws plus recommended course of action for affected consumers
Billing World article: Telecom Fraud on the Rise
Lasar's Letter on the Federal Communications Commission: FCC slams 13 telcos for slamming--exonerates three
Identify Fraudulent Charges in Your Phone Bill guide from non-profit consumer group on identifying and disputing fraudulent charges
Three key steps to stop unwanted callers is a stepped approach to stopping phone fraud.
16 Ways You Can be Phone Scammed a list of the most popular phone scams.
OFCOM: Problems with your landline phone: slamming - advice from the British communications regulator
Daily Mail
Daily Mail
The Daily Mail is a British daily middle-market tabloid newspaper owned by the Daily Mail and General Trust. First published in 1896 by Lord Northcliffe, it is the United Kingdom's second biggest-selling daily newspaper after The Sun. Its sister paper The Mail on Sunday was launched in 1982...

: Phone scam hits thousands
The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...

: When slamming the phone prompts a row
Report a Caller a user generated site for researching and reporting abusive callers and phone scams.
The Guardian: Orange slammed as users see red - concerns over data protection by British mobile telecom suppliers
Bell Canada Fraud Control Centre

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