A Guide to Telephone Scams

INTRODUCTION

TOLL CALL PHONE SCAMS

It's not always easy to recognize international numbers. In most cases, to make a call to another country you have to dial 011, a country code, a city code, and then more digits. The total number of digits may be different from the 11 digits necessary for a domestic long-distance call (1-area code-xxx-xxxx). However, there are some international phone numbers in the Caribbean, Canada and other countries that look just like U.S. numbers, with a 3-digit area code and a total of 11 digits. So it can be hard to tell at a glance the difference between a number in Connecticut and one in the Dominican Republic.

Some international numbers are actually foreign pay-per-call services that are billed at substantially higher than normal rates. And, because FCC cost disclosure requirements do not apply to foreign phone services, consumers often don't discover the problem until they get their phone bills.

The problem is even more complicated by the fact that in addition to direct-dialing, there are other ways to connect to an international phone line. For instance, it's possible to call a toll-free 800 number or a local phone number and then dial an "activation number" to connect to another line, which may be in a foreign country. In international phone scams, consumers don't realize that they are being instructed to dial numbers that will connect them to foreign phone lines. The motivating factor in international phone scams is that the con artist at the other end of the line gets a cut of the money that the consumer pays for the call, through a commission or kick-back from the foreign phone company. That isn't legal in the U.S., but the Federal Communications Commission (FCC) has no jurisdiction over telephone companies in other countries.

Initially, consumers are lured into calling 809 and other international numbers by advertisements in newspapers, magazines, flyers, or mailings for job opportunities, adult talk lines, psychic services, etc.

There aren't any jobs or loans, and consumers are often placed on hold for long periods of time while the phone charges mount. These scams are still around, but the latest international phone frauds involve messages left on people's answering machines or pagers, or even on their e-mail. Sometimes the messages purport to be about debts and threaten legal action unless the consumers call back immediately; in other instances, they say that something has happened to a family member. When consumers return the calls, they find there is no debt or any other legitimate reason to call. And, as in the advertising scams, they don't realize the calls are to international phone numbers until they get their bills. When people discover that they've been victimized, they usually call the phone company that billed them, their local or long-distance phone company. Part of the charges do go to the U.S. long-distance carriers for connecting the calls to the international phone companies. But the U.S. companies have no way of knowing that the calls are not legitimate, and the bulk of the charges go to the foreign phone carriers (and the crooks). The U.S. carriers may be willing to forgive some or all of a disputed bill on a one-time basis (Consumers should check with their state public utilities departments to see if they have any special rights in this regard.). Blocks can also be placed on consumers' lines to prevent household members from making foreign calls. But this may not be a solution for everyone, especially people who do occasionally need to call other countries. The FCC and other agencies are discussing these problems with authorities in other countries.

With an increasing number of new area codes, both in the U.S. and elsewhere, it will be even more difficult to spot international phone frauds in the future. Consumers should be wary of responding to mysterious messages or ads that don't provide much detail about what's being offered or the cost.

The best advice is never to return calls to unfamiliar numbers. If it's not clear whether a number is domestic or international, check the map in the front of the phone book that shows the U.S. area codes or call the operator. Consumers can report international phone scams to their state or local consumer protection agencies, and they can also let the Federal Trade Commission (FTC) and the Federal Communications Commission know about the problems.

PAY PHONE RIPOFFS

A long distance call from a pay phone could likely be the most expensive call you ever make. Pay phones often have a "captive audience". In most cases, the customer has no idea who the long distance provider is at that pay phone, let alone how much a call will cost. Industry horror stories chronicle such abuses as charging several dollars for a directory assistance call, to being charged several dollars per minute for a simple call across town.

The most important thing to keep in mind when making a long distance call from a pay phone is that the moment you give-up control of how you make that call, you lose all control of how much that call will cost you. Never make a long distance call by dialing "0" or "00", unless you can absolutely avoid it. These are the most expensive calls that you will ever make, under any circumstance! Paying an average of a dollar per minute for these calls is not uncommon. If you have no other way to make the call, use 1-800-CALL-ATT.

Avoid using services such as 1-800-CALL-ATT, or 1-800-COLLECT unless absolutely necessary. Though these calls are not as expensive as dialing "0", they still have hefty surcharges and per-minute rates. In some cases, private pay phone owners have (illegally) blocked access to these numbers, or divert calls (called "splashing") made to these numbers to their own operators, who may charge an outrageous rate for your calls. It can be nearly impossible for you to tell the difference between services, until you receive your bill!

Avoid using calling cards offered by the major carriers, including AT&T, MCI and Sprint. Each of these company's cards include surcharges of up to $.85 per call, on top of their high per-minute fees. Use a no-surcharge card offered by a smaller long distance carrier. Not only do these companies offer calling cards with no surcharges, but their per-minute rates are generally lower, as well. By choosing the right calling card, you can save as much as 95% off of the rates charged by the "Big Three".

If you do use a service such as 1-800-CALL-ATT, or 1-800-COLLECT on a regular basis from pay phones, memorize (or write down) the actual phone numbers that these services correspond to (i.e. 1-800-CALL-ATT =1-800-225-5388). The reason? Many private pay phone operators are removing the corresponding letters from the keypads of their pay phones. These companies lose revenue every time you "dial around" their operators by using services such as 1-800-CALL-ATT, so they are removing the letters to confuse consumers about which numbers they should dial. If the customer can not remember the corresponding phone NUMBER for these services (even some calling cards use 800 access "numbers" such as this, as with AT&T) they are usually forced to dial "0" to make a collect, or calling card call.

Avoid using calling cards issued by your local phone company. Though their per-call surcharges are usually lower (NO surcharge is acceptable though!), their per-minute rates can be a nightmare on some calls. At the moment, most local phone companies are not allowed to carry calls made outside of the irrespective calling areas using their cards. Therefore, you will end-up paying whatever rate the pay phone company owner wishes to charge you when making most long distance calls. These rates are not set, nor agreed upon, by your local phone company, but the charges will appear on your local phone bill. These calls can also average a dollar or more per minute. Use Public Pay phones wherever possible. These pay phones are operated by the local phone company, and not by private pay phone owners. Not only are private pay phones more apt to overcharge you for long distance calls, but they may also charge you more for local calls, as well. These phones often cut-off your conversations on local calls after 15 minutes, demanding additional money to continue with your conversation. In some cases owners have illegally installed phones that charge more than the state-regulated rate for local calls.

Do you use pay phones to call home or back to the office frequently? If so,you may very well want to get your own 888 or 800 number. You can order you own 888 number to ring-in on your phone line back at the office, or at home, for a fraction of what it would cost to make a traditional calling card call (in excess of 95%, on some short calls). Most long distance carriers now offer their customers rates on personal and business 888 numbers as low as twelve cents per minute, and bill all of their calls in six second increments, rather than rounding-up all of your calls to the next full minute. This feature alone can save you a bundle on short calls. With good 888 numbers, there are NO per-call surcharges(as on many calling cards) and you can often get an easy to remember number,such as 1-888+your local 7-digit phone number. You can also give the number to friends, family, and business associates whose calls you wish to receive, and pay for. This is generally the cheapest way to make calls to specific numbers from a pay phone. For calls to locations other than the ones above, we highly recommend a no surcharge calling card from a small long distance carrier, or reseller. If you make short (typically business) calls on a calling card, we recommend using a card that offers six second billing increments, and does not round-up all of your calls to the next full minute. Some companies (Telegroup, Fairfield, IA 1-800-338-0225, or Voice Net, Long Island, NY,1-800-978-3532 ) will even allow you to use their cards without changing your present long distance carrier, and often offer some attractive international rates, in addition to great domestic rates. The Telegroup card offers the best international rates, but a (slightly) higher domestic rate($.189 per minute). The Voice Net Card has a better domestic rate ($.175 per minute), but can only be used from inside the U.S. (no international origination). Both cards offer six second billing increments.

Beware of cheap prepaid calling cards! These cards are often offered at convenience stores, via magazine ads, or through multi-level marketing. Some cards offered by "no name" companies can end-up being less of a bargain than it may appear. Though their per-minute rates may look low (TOO low, in fact)the company that produces the cards may not be in business long enough for you to use them, and you may end-up with a worthless wallet full of plastic.We have seen rates as low as 7.9 cents per minute on these cards (less than what it actually costs the long distance carrier to connect the call!), but most of these "cheap" cards are not backed by reputable companies. Customers using the cards may end-up calling the 1-800 access number on the back of the card, only to find that the number is busy, or has been disconnected.

As a general rule, it is best not to pay for long distance services in advance,since you will have no way of knowing whether the company will be around long enou! gh to fulfill their commitments. If you do buy prepaid cards (they are great stocking stuffers, birthday gifts, etc.) we recommend buying them only from actual long distance carriers (not likely to disappear), or from established phone card providers such as LDDS Phone pass, MCI, Sprint, Talk N'Toss or Hello Direct (Farmingdale, NY, 1-800-Hi-Hello). These cards can be obtained for as low as $.20 per minute, in some locations and catalogs.

GUEST AND EMPLOYEE SCAMS

Many employees use the company long distance lines for personal calls. This is stealing, and it can hurt an employer. Even if the company is large, have many employees who steal long-distance time can add up to a big bill. Most employees don't feel bad about it at all. A more malevolent group of phone thieves calls toll numbers from your office or home without your knowledge. They may dial an international toll call, or a local one. These thieves mostly target stores, offices, and other retail locations that may provide a courtesy phone. By the time you get the bill, they are long gone. In some cases, you can dispute the charges, but some people don't notice the charges. This scam goes hand-in-hand with the international toll calling service scam.

Roommates and family members may also make more calls than you can afford to pay for. There are countless cases of someone's uncle, sister, or visiting friend who runs up a two-thousand dollar phone bill calling outside of the country during a long visit at someone's home. The phone company WILL make you pay, even though it's not technically your fault. If you can't pay, you may have your phone service interrupted until you pay off the debt.

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