Home: Consumer Protection Alert: Pre-Paid Phone Cards & Other Phone Scams

Phone Scams

You receive a call and the calling party starts giving you instructions. After you hang up, you may wonder ... Was that a phone scam? We feel that the more you know about the various phone scams, the easier it is to protect yourself. Here are some tips that may help you identify and avoid telephone fraud

Phone Scam #1

An old phone scam that could cost businesses money is making its way through the Internet, again.

An e-mail message warns people about a scam in which a caller claiming to be a phone technician says he or she is testing the line and needs the person who answered the phone to dial 9, 0 and #. Dialing 90# gives the caller the needed access to place long-distance calls that will be billed to that number. According to AT&T Corp., says the scam does not work on residential phone lines. It's targeted to businesses that use the private branch exchanges, or PBX lines. AT&T also said technicians never call customers asking for help in checking phone lines. People who receive such calls should ask for the technician's name and a call-back number, and then hang up to report the call to your phone company.

Phone Scam #2 - Revealing your calling-card-number

Your calling-card-number is like money in the bank to scam artists who can use it to sell long-distance calls to locations around the world. Here are some potential scams that may con you out of your calling-card-number:

Someone calls you at home posing as a telephone representative and asks for your calling-card-number to check on unauthorized charges billed to your account. Or, the caller may tell you that your calling-card-number has been deactivated in error and that he needs you to "verify" your number so it can be re-instated in the system.

Phone Scam Solution: Never give your calling-card-number to anyone over the phone no matter how convincing they sound.

AT&T has systems in place that will provide an early warning that fraud may be occurring. For example, a high incidence of international calls on a customer’s calling card that previously showed no international calls will trigger an alert to AT&T for investigation.

AT&T will, in fact, inform customers if they believe a customers calling-card-number is being used fraudulently. However, an AT&T representative would never ask customers to identify their calling card number, unless you initiate an operator-handled call.

Phone Scam #3 - Cramming and Slamming

According to the National Fraud Information Center, Cramming is currently the top scam for 1998. "Cramming" occurs when telephone customers are charged for services they’ve never ordered or received. Close behind came "Slamming," which occurs when customers have their telephone service switched without their permission. Here are some common ways you could be crammed or slammed!

You may receive a sweepstakes promotion in the mail telling you to call an 800 number to win a prize. When the call is made, an automated system is activated and you are unknowingly enrolled in a club or program, and the charge is placed on your phone bill. Or, you may fill out a contest entry form, only to discover later than the promoter used your phone number to sign you up for a calling card, voice mail or some other service. In many instances, the fine print on the form said that by entering the contest, you have signed up for the service.

You may receive a call from a telemarketer asking you to switch your long-distance service. Although you say you are not interested in switching, your long-distance service is changed anyway. Or, you may fill out a contest entry form, which also changes you long-distance service without your knowledge. In many instances, the fine print on the form said that by entering the contest, you have agreed to switch your service.

Phone Scam Solution: You can guard against both cramming and slamming by reading your phone bill carefully each month. Watch for unfamiliar company names, logos or charges that you don’t understand or don’t remember ordering. Call your carrier or the number associated with the charge and ask for an explanation.

Ask that all offers from communications providers be sent to you in writing so that you may review them before making a decision. Read the offers carefully before signing any form, contest entry, check or survey.

Make a note of the name and telephone number of the marketing representative in case you need to reach the company in the future.

Check your telephone bill periodically to make sure you still have the long-distance company you selected. You can call (toll free) 1-700-555-4141 to verify your long-distance company.

Phone Scam #4 - International Calls Without Realizing It

It’s not always easy to tell if you’re dialing an international telephone number. In most cases, you have to dial "011’ to begin a call to a foreign country. But there are locations outside the U.S. whose telephone numbers may look like domestic long-distance calls, but they are actually international calls and international rates apply. For example, 809, 284 and 876 are area codes in the Caribbean.

There are many scams that deceive consumers into calling international numbers. You may see an ad for a service that directs you to call a specific number, or you may receive a page, an e-mail message or an ‘urgent" message on your answering machine. All messages direct you to call a number for more information – almost always an international number.

Phone Scam Solution: Be cautious about area codes you don’t recognize. Check your telephone directory or call the operator to determine where the area code is before making your call.

Control access to your telephone so unauthorized callers do not use your phone to call these services. A block on calls to "900" services will not stop calls to "011" or "809" numbers. If you’re sure you won’t need to make international calls, call your long-distance carrier and ask them to put an international block on your telephone line.

Phone Scam #5 - Call Forwarding Scam

You may receive an automated message on your telephone that says you have won a prize or money. The message directs you to dial a 2-digit code preceded or followed by the * or # key (such as *79 or 72#), and then an 800 number to claim your prize. When you dial the number, you are not connected to anyone. What this procedure has done, though, is program your telephone to forward your calls to a long distance operator. Con artists can then call your number, be forwarded to the long-distance operator and place calls that are billed to your home telephone number.

Phone Scam Solution: If you receive this type of call, simply hang up. If you receive this message on your answering machine, do not place this call. No legitimate sweepstakes or contest would likely contact you in this manner.

Know the numbers used for Call Forwarding from your local telephone company.

Possible Pre-Paid Phone Card Scam

What Is a Pre-paid Phone Card? 

A pre-paid phone card is a card you purchase (for a set price) and use to make long distance phone calls. These cards are usually sold in dollar amounts or by number of minutes.

Why Do People Buy Pre-paid Phone Cards? 

Many people use a pre-paid phone card because of the card’s convenience - it can be used anywhere and, since you pay in advance, there is no bill. Pre-paid phone cards are popular among travelers, students, people who frequently call overseas, and those who haven’t selected a long-distance service. In addition, pre-paid phone cards are sold in convenient places, such as newsstands, post offices, and stores.

What about International Calls? 

Rates for international calls can vary dramatically, based on the country that you call or the way that you make the call. Pre-paid phone cards often offer rates that are much lower than a telephone company’s basic international rates.

How Do I Use a Pre-paid Phone Card? 

A toll-free access phone number and a personal identification number (PIN) are usually printed on each phone card. To make a phone call, you dial the access number and then enter the PIN. An automated voice will ask you to enter the phone number you are trying to call, and it will tell you how much time you have left on your card. It might also give you other information/options.

Phone card companies keep track of how much of a card’s calling time is used by the card’s PIN number. You can add time to some pre-paid phone cards, and the added cost can usually be billed to a credit card. If you cannot add time to your card, you will need to buy a new one once all the time has been used. Also, pre-paid phone cards often have expiration dates. Make sure to keep track of the date your card expires so you don’t lose unused minutes.

Who Makes Your Phone Card Work? 

• Carriers are responsible for the telephone lines that carry calls.

• Resellers buy telephone minutes from the carriers.

• Issuers set the card rates and provide toll-free customer service and access numbers.

• Distributors sell the cards to the retailers.

• Retailers sell the cards to consumers (though it is important to remember that a store may not have control over the quality of the card or the service it provides).

What Are Common Complaints about Pre-paid Phone Cards? 

As pre-paid phone cards are increasing in popularity, some common complaints are becoming evident. They are:

• Access numbers and/or PIN's that don’t work;

• Service or access numbers that are always busy;

• Card issuers that go out of business, leaving people with useless cards;

• Rates that are higher than advertised, or hidden charges;

• Cards that charge you even when your call does not go through;

• Poor quality connections; and

• Cards that expire without the purchaser’s knowledge.

How Can I Avoid the Problems Associated with Pre-paid Phone Cards? 

Make sure you understand the rates for your particular phone card. Also check the expiration date, look for a toll-free customer service number provided with or on the card, and make sure you understand the instructions on how to use the card. You may also want to ask your friends and family to recommend cards they have used and liked.

 What Should I Do if My Pre-paid Phone Card Doesn't Work? 

First, try calling the customer service number provided with the card. If that doesn’t work, call or write your local Consumer Affairs Department or state Attorney General. (These phone numbers are often found in the blue pages of your telephone book.) You can also file a complaint or research the company through your local Better Business Bureau.

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