#131: Toll Fraud

[F.U.C.K. is an e-zine that I started on January 24, 1993 and ended on January 24, 2000. One concept is that articles should be timeless if possible, so they were not released with dates. As such, the date on this blog is not exact but I will try to use a date as close as possible.]

Do you ever wonder why your phone rates are so expensive? Do you consider your rates to be ‘pretty good’? If so, you need to reconsider some facts about your phone company. Regardless of what carrier you are going through, you are getting charged unmercifully for basic services that are fully automated, and basically cost free on maintenance.

A few months ago I read a book called Information Warfare by Winn Schwartau. Great book, and I recommend it. In one of his chapters he dealt with telephone fraud and mentioned some basic facts, methods, etc. Some of the stats he put in there intrigued me, and in turn lead to this file. He printed up MCI’s estimates of alleged phone fraud/abuse for 19__ in this chapter. Here they are:

 Stolen Long Distance         $1,800,000,000
 800 Toll Fraud                  350,000,000
 Victim Costs                     51,000,000
 Carrier and Vendor Fees          32,000,000
 Cellular Fraud                  700,000,000
 Credit Card Toll Fraud          400,000,000
 COCOT Fraud                      60,000,000
 Subscription Fraud              300,000,000
 Telabuse                      5,200,000,000

 Total                        $8,893,000,000

This means that every person in the world (all 5 billion or so) has committed $1.77 of telephone fraud. If this is purely domestic, then that means each American committed some $29.65 worth of toll fraud. Do you believe it?

Assuming about 400,000 people in the world (Hackers, Phreaks, Gangs, Phone Employees, etc..) have the skills and resources to actually commit toll fraud, and are willing too, that is $22,232.50 in toll fraud per person.

In the book, it doesn’t go into detail about what each of these categories mean. Some are quite obvious, but others are extremely vague, and happen to have the larger numbers. Lets break these down real quick and figure out what they mean.

If all those other ones are toll fraud, then why should victim cost be in there? Isn’t that what fraud is? Stealing service/money from another? Since when does that actually COST the victim? If someone steals some calls from me by beige boxing, do I actually PAY for anything? No. This is a convenient way for them to put the number in there twice.

Carrier and Vendor Fees is 32 mil? Translated, they are charging way too much for some really basic shit.

COCOT fraud – 60 mil?!?! The only way it could be that high is if everyone knew how to abuse one, and it actually worked. I can tell you that in several NPAs I have been in, including the one I live in, it is much easier to build a red box and hit normal payphones instead of spending time to do a COCOT.

Subscription fraud… hmm. guess that means when new customers subscribe and then cancel after getting some free service, if so, then once again, look at what they are charging!

Stolen Long Distance is one of the highest on the chart. Problem is, once again they are putting the same shit on there twice (if not more now). If I abuse a COCOT what do I do? Steal long distance. If I hack a cellular phone and make a call, what am I stealing? If I use someone else’s credit or calling card, what am I stealing in the long run? Long Distance, yet those topics are all individually put on the chart.

And the ever so cryptic ‘teleabuse’. What the fuck is that if not everything else they listed?

The point of all this. Those figures are the basis for inflating rates to counter fraud. Credit Card companies, cell companies, phone companies, and all sorts of other companies do the same thing. And we wonder why inflation exists?

Last thing to consider.. If those are the stats for MCI alone, think of what AT&T will claim? 15 Billion? 20 Billion? Do you REALLY think people steal that much phone service? Do they have a legitimate argument to raise prices THAT much? I didn’t think so.. write to your senator, the Better Business Bureau, and to the phone company itself. Tell them to quit with the bullshit reason for inflated prices.

“There are two kinds of customers; those that have been the victims of toll fraud, and those who will be.” – MCI, 1991

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