Phone fraud

Source: Wikipedia, the free encyclopedia.

Phone fraud, or more generally communications fraud, is the use of telecommunications products or services with the intention of illegally acquiring money from, or failing to pay, a telecommunication company or its customers.

Many operators have increased measures to minimize fraud and reduce their losses. Communications operators tend to keep their actual loss figures and plans for corrective measures confidential.[1]

According to a 2011 survey by CFCA, an industry group created to reduce fraud against carriers, the five top fraud loss categories reported by operators were:[1]

  • US$
    4.96 billion – compromised PBX/voicemail systems
  • $4.32 billion – subscription/identity theft
  • $3.84 billion – International Revenue Share Fraud
  • $2.88 billion – by-pass fraud
  • $2.40 billion – cash fraud

Types of frauds

Fraud against users by phone companies

  • Cramming 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 client. 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 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 desiring to steal business from competing service providers.
  • False Answer Supervision is a misconfiguration of telephone company equipment, by negligence or design, which causes billing to start as soon as the distant telephone begins ringing, even if a call is busy or there is no answer. The cost is typically subtle but recurring as subscribers repeatedly pay some small amount for calls which were never completed.[2]

Fraud against customers by third parties

  • installer and telecommunications company personnel "testing the system") or bribery and collusion with dishonest employees inside the firm may be used to gain access.[citation needed
    ]
  • A variant is a call forwarding scam, where a fraudster tricks a subscriber into call forwarding their number to either a long-distance number or a number at which the fraudster or an accomplice is accepting collect calls. The unsuspecting subscriber then gets a huge long-distance bill for all of these calls.[3]
  • A similar scheme involves forwarding an individual PBX extension to a long-distance or overseas number; the PBX owner must pay tolls for all of these calls.
    SIP addresses
    which request outside numbers on a gateway; as they are computers, they are targets for Internet system crackers.
  • war dialing, which takes its name from a scene in the 1983 movie WarGames in which a 'cracker' programs a home computer to dial every number in an exchange, searching for lines with auto-answer data modems. Sequential dialing is easy to detect, pseudo-random dialing is not.[4]
  • In the US, owners of customer-owned coin-operated telephones (COCOTs) are paid sixty cents for every call their users make to a toll-free telephone number, with the charges billed to the called number. A fraudulent COCOT provider could potentially auto-dial 1-800 wrong numbers and get paid for these as "calls received from a payphone" with charges reversed.
  • Autodialers are also used to make many short-duration calls, mainly to mobile devices, leaving a missed call number which is either premium rate or contains advertising messages, in the hope that the victim will call back.[5]
    This is known as Wangiri (literally, "One (ring) and cut") from Japan where it originated.
  • pagers, or making bogus claims of being a relative in a family emergency to trick users into calling the number, then attempting to keep the victim on the expensive call for as long as possible.[6] A later version of the 809 scam involves calling cellular telephones then hanging up, in hopes of the curious (or annoyed) victim calling them back.[7] This is the Wangiri scam, with the addition of using Caribbean numbers such as 1-473 (Grenada) which look like North American domestic calls.[8]
  • Pre-paid telephone cards or "calling cards" are vulnerable to fraudulent use. These cards show an access number that can be dialed to bill worldwide toll calls to the card via a passcode printed on a particular card. Anyone who obtains the passcode can make calls charged to the card.
  • Carrier access codes were widely misused by phone-sex scammers in the early days of competitive long distance;[citation needed] the phone-sex operations would misrepresent themselves as alternate long-distance carriers to evade consumer protection measures which prevent US phone subscribers from losing local or long-distance service due to calls to +1-900 or 976 premium numbers. This loophole is now closed.[citation needed
    ]
  • In the US,
    area code 500 and its overlays permit a "follow-me routing" in which, if the number has been forwarded to some expensive and arbitrary destination, the caller is billed for the call to that location. Similar issues existed with area code 700 as the numbers are specific to long-distance carriers (except 1-700-555-4141, which identifies the carrier). Because of the unpredictable and potentially costly rate for such a call, these services never gained widespread use.[citation needed
    ]
  • office equipment in use (such as photocopiers), sending unsolicited shipments of supplies for the machines, and then billing the victims at inflated prices.[citation needed
    ]
  • scanner radio
    could intercept analogue conversations in progress, or a handset of the same or a similar model as the target system may be usable to make toll calls through a cordless base station which does not authenticate calls. Obsolete analogue mobile telephones have stopped working in areas where the AMPS service has been shut down, but obsolete cordless phone systems may remain in service as long as analog telephony is supported.
  • A scam involving Indian call centers targeting American or Canadian customers demanding "unpaid taxes" by impersonating government officials was reported in 2016.[10] Similar government impersonation scams include the SSA impersonation scam.
  • Every day, hundreds of scam calls are received on the US mainland which offer the recipients grant money from the Federal Government, but requesting a "small administration fee",[11] although there are no fees associated with applying for or receiving a government grant.
  • During the 1980s, a common form of premium-rate fraud involved manipulating children (often through
    DTMF tones to automatically trigger the dialing of a premium number.[12]
    Such practices are now illegal in the United States.
  • The Can You Hear Me? telephone scam was alleged to be used in North America in 2017: the caller would ask a question with the answer "yes", then use a recording of the "yes" to make telephone transactions.

Fraud between phone companies

  • 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.[citation needed]
  • Worldcom financial troubles; the refiling scheme is based on a quirk in the system by which telecommunications companies bill each other – two calls to the same place may incur different costs because of differing displayed origin. A common calculation of payments between telecommunications companies calculates the percentage of the total distance over which each telecommunications company has carried one call to determine division of toll revenues for that call; refiling distorts data required to make these calculations.[citation needed
    ]
  • PBX-style trunks, its operator is forced to rely on a hardware configuration with Internet telephony on one side and a large number of mobile SIM cards
    and handsets on the other to place the calls as if they were from individual local mobile subscribers.

Fraud against phone companies by users

  • Subscription fraud: for example, signing up with a false name, or no intention to pay.[citation needed]
  • Collect call fraud: most automated collect call systems allow the caller to record a short audio snippet, intended to identify the caller so that the recipient can decide whether or not to accept the charges. With the system being automated, the caller could insert any message they want, free of charge, as long as it fit within the short allotted time, and the recipient could refuse charges. A variant is to refuse a collect call at the higher operator-assisted rate, then call the person back at a lower price.
  • Person-to-person call
    fraud: Under archaic operator assistance systems, a person-to-person call only charged a caller if they could reach a specific person at the other end of the line. Thus, if coordinated beforehand, a caller could use a false name as a code word, with the recipient rejecting the call, and no one would be charged.
  • Intentional non-return of rental equipment (such as extension telephones) when relocating to a new address. The equipment would then be used at the new location without paying a monthly equipment rental fee. This has become rare as most telephones are now owned outright, not rented.

Frauds against phone companies by third parties

See also

References

  1. ^ a b CFCA. "CFCA's 2011 Worldwide Telecom Fraud Survey" (PDF). CFCA. Retrieved 5 December 2011.
  2. ^ Bradford, Valerie (October 25, 2012). "Call Fraud Scenarios". The TransNexus Blog. Archived from the original on 2014-02-20. Retrieved 2014-02-03.
  3. ^ "FACT CHECK: Call Forwarding Scam". Snopes.com. Retrieved 9 May 2019.
  4. ^ "Sequential Calls".
  5. ^ "You've got my number". The Economist. October 3, 2002. Archived from the original on 2014-02-03. Retrieved 2014-02-03.
  6. ^ "Beware of Fraudulent International Phone Calls". Better Business Bureau. 2004-04-07. Archived from the original on 2014-02-07. Retrieved 2014-01-29.
  7. ^ "BBB Warns of One Ring Cell Phone Scam". Better Business Bureau in Wisconsin. 2014-01-29. Archived from the original on 2014-02-19.
  8. ^ Evans, Whitney (2014-01-01). "Scammers calling from 473 area code, police warn". KSL.com Utah. Archived from the original on 2014-02-20. Retrieved 2014-02-03.
  9. ^ "Fraud prompts UK phone firms to tweak networks". BBC News. 2014-03-13. Archived from the original on 2014-03-14. Retrieved 2014-03-14.
  10. ^ Zanane, Anant R. (2016-10-05). "How Workers From 9 Call Centres Near Mumbai Extorted Crores From Americans". NDTV. Archived from the original on 2016-10-06.
  11. ^ "Phone grant scam". scamcallfighters.com. Archived from the original on 2017-09-05. Retrieved 2017-09-05.
  12. ^ Stern, Jane; Stern, Michael (1992). Jane & Michael Stern's Encyclopedia of Pop Culture: An A to Z Guide to Who's Who and What's What, from Aerobics and Bubble Gum to Valley of the Dolls.
  13. ^ "AT&T Says Data Miners Defrauded It". Court House News Service. 2011-08-16. Archived from the original on 2014-02-03. Retrieved 2014-02-03.

External links