Whether in the form of the consumer attempting to defraud the telephone company, the telephone company attempting to defraud the consumer, or a third party attempting to defraud either of them, fraud has been a part of the telephone system almost from the beginning. A telephone company (or telco) provides telecommunications services such as telephony and data communications. ... The telephone is a telecommunications device which is used to transmit and receive sound (most commonly voice and speech) across distance. ...

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

Types of frauds

Fraud against users

Frauds 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 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 is any fraudulent, unauthorised change to the default long-distance 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 is an illegal telecommunications practice of changing subscribers long distance or other telephone service without their consent. ...

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 or even as War dialing. War dialers take their name from a scene in the early-1980's 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. One more recent variant involves claiming to be a customer-owned coin-operated telephone (COCOT) 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".

• Dialer programs containing malware 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 Moldovan phone number^{[citation needed]}.

• Pre-pay telephone cards 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 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-..., +1-876-WET-... or +1-876-SEX-... numbers in Jamaica, plus numbers in Antigua, Montserrat and a number of other Caribbean or overseas countries) are used to bypass consumer protection laws which govern premium numbers and phone sex 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 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 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 and elderly persons; scams in which a caller attempts to obtain banking or credit card 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.

PBX redirects here. ... Trickery is modernly defined as the practice of crafty underhanded ingenuity to deceive or cheat to play a trick on someone is the art of trickery. ... Impersonation is when someone or something tries to seem like someone or something else. ... An installation program or installer is a computer program that installs files, such as applications, drivers, or other software, onto a computer. ... An auto-dialer is an electronic device that can automatically dial telephone numbers to communicate between any two points in the telephone, mobile phone and pager networks. ... Telemarketing fraud is fraudulent selling conducted over the phone. ... War dialing or wardialing was a technique in the 1980s and 90s by which a computer would repeatedly dial a number (usually to a crowded modem pool) in an attempt to gain access immediately after another user had hung up. ... This article is about the 1983 US movie. ... Children playing on a Amstrad CPC 464 in the 1980s. ... A modem (from modulate and demodulate) is a device that modulates an analogue carrier signal to encode digital information, and also demodulates such a carrier signal to decode the transmitted information. ... A payphone or pay phone is a public telephone, with payment by inserting money (usually coins) or a debit card (a special telephone card or a multi-purpose card) or credit card before a call is made. ... Malware or malicious software is software designed to infiltrate or damage a computer system without the owners informed consent. ... A telephone card, calling card or phone card for short, is a small card, usually resembling a credit card, used to pay for telephone services. ... // Present day 809 The area codes (809) along with (829) (as an overlay), are today the local telephone area codes solely for the Dominican Republic Following Saint Vincent and the Grenadines in the year 1999, no other countries still pass-thru old numbers from the legacy 809 area code. ... West Indian redirects here. ... Premium-rate telephone numbers are telephone numbers for telephone calls during which certain services are provided, and for which prices higher than normal are charged. ... Phone sex refers to sexually explicit conversation between two or more persons via telephone, especially when at least one of the participants masturbates or engages in sexual fantasy. ... A pager is an electronic device used to contact people via a Paging (telecommunications) network. ... Phone sex refers to sexually explicit conversation between two or more persons via telephone, especially when at least one of the participants masturbates or engages in sexual fantasy. ... A confidence trick, confidence game, or con for short, (also known as a scam) is an attempt to intentionally mislead a person or persons (known as the mark) usually with the goal of financial or other gain. ... This article is about spam, the abuse of electronic communications media to send unsolicited bulk messages. ... Consumer protection is a form of government regulation which protects the interests of consumers. ... Telemarketing fraud is fraudulent selling conducted over the phone. ... This article needs to be cleaned up to conform to a higher standard of quality. ... This article needs more context around or a better explanation of technical details to make it more accessible to general readers and technical readers outside the specialty, without removing technical details. ... Old age consists of ages nearing the average lifespan of human beings, and thus the end of the human life cycle. ... For other uses, see Bank (disambiguation). ... Credit cards A credit card is a system of payment named after the small plastic card issued to users of the system. ... Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as paper work). The term includes small, expendable, daily use items such...

Fraud against phone companies

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.

For a time, WorldCom (WCOM) was the United States second largest long distance phone company (AT&T was the largest). ...

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 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 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. 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.

• Payphones 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 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 phones 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 concerns with mobile and cordless 'phones; a scanner radio may intercept analogue conversations in progress.

Phreaking is a slang term coined to describe the activity of a subculture of people who study, experiment with, or explore telephone systems, the equipment of telephone companies, and systems connected to public telephone networks. ... Social engineering is the practice of obtaining confidential information by manipulation of legitimate users. ... A telephone company (or telco) provides telecommunications services such as telephony and data communications. ... Employment is a contract between two parties, one being the employer and the other being the employee. ... 2600 Hz is the frequency in hertz (cycles per second) that AT&T formerly put as a steady signal on any long-distance telephone line that was not currently in use. ... It has been suggested that Spiro_%28device%29 be merged into this article or section. ... A red box is an illegal phreaking toll fraud device that generates tones to simulate inserting coins in pay phones, thus fooling the system into completing free calls. ... A payphone or pay phone is a public telephone, with payment by inserting money (usually coins) or a debit card (a special telephone card or a multi-purpose card) or credit card before a call is made. ... A payphone or pay phone is a public telephone, with payment by inserting money (usually coins) or a debit card (a special telephone card or a multi-purpose card) or credit card before a call is made. ... A portable phone or cordless phone is a wireless telephone which is associated with a fixed telephone landline (POTS) and can only be operated close to (typically less than 100 metres of) its base station, such as in and around the house. ... Privacy is the ability of an individual or group to keep their lives and personal affairs out of public view, or to control the flow of information about themselves. ... A scanner is a radio receiver that automatically tunes, or scans, 2 or more discrete frequencies. ...

Frauds against the phone company by phone company employees

See also

• Mail fraud
• Internet fraud
• Credit card fraud
• Wire fraud
• Mobile phone spam
• Dial tapping

This article needs to be cleaned up to conform to a higher standard of quality. ... This article does not cite its references or sources. ... Credit card fraud is a kind of fraud where a merchant (business, service provider, seller, etc. ... Wire fraud is a legal concept in the United States Code which provides for enhanced penalty of any criminally fraudulent activity if it is determined that the activity involved electronic communications of any sort, at any phase of the event. ... Mobile phone spam is a form of spamming directed at the text messaging service of a mobile phone. ... The rotary dial is a device mounted on or in a telephone or switchboard that is designed to send interrupted electrical pulses, known as pulse dialing, corresponding to the number dialled. ...

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