Phone Scam hits Good Samaritans

Some frauds are so easy they are bound to catch on. The latest doorstep scam to hit the South East of England is so simple that it is almost foolproof.

The fraudster rents a premium rate phone line from a telco. In the UK there are some lines that can cost those calling up to GBP50 (yes, fifty pounds) for each minute the call is connected. Having rented the line, the fraudster knocks at the door of a house and asks to make an emergency call home. The claim may be that there is car trouble, for example. When the householder helps out, the call is made and will last for, perhaps, five minutes. When the bill arrives (and in the UK most people get telephone bills quarterly) there is a charge for one very expensive call. In some cases, the loss has been GBP250.00.

The system from the point of view of the telco is simple - the telco pays the premium phone line operator the amount billed to the customer less the service charge. The fraudster receives money from the telco on a monthly account. So the money is credited to the fraudster long before bills arrive, in many cases.

Can banks help? Yes - where an account begins to receive regular credits from a telco, often substantial relative to the usual conduct of the account, this may be cause for suspicion.

Telcos can help by ensuring that funds are credited to an account and not issued in cheque or bankers' payment forms, so ensuring that the money is credited to an account which is trackable to the individuals. If cheques come back marked that they have been endorsed, perhaps cashed with a cheque casher, then the Telco may consider this suspicious.

Telcos are, generally, not under any duty to perform any due diligence on operators of premium telephone lines. Such operators are not regarded as a credit risk - the telco collects the money from its customers and the premium line operator does not have a debit balance. However, most will make refunds where it is clear that there is a mistake on a bill or where there has been a fraud.

So, is there a fraud here? Yes - obtaining a pecuniary advantage by deception is the essence of fraud in common law countries. The lie to obtain access to the telephone is evidence of the fraud. However, in one case at least, the homeowner stood next to the "visitor" because of a fear of doorstep crime where the visitor steals from the house. The householder heard a voice at the other end of the phone and believed that the woman caller was, in fact, speaking to her husband. This suggests that the Telco must have a record of where the call ultimately terminated.

Can the fraud be profitable? If it runs for three weeks before the roof falls in, and the caller makes ten calls a day netting at least GBP200 per call, then the gain will be in excess of GBP40,000. And the risk of capture is small if the fraudster has any understanding of how to use the financial services system avoiding the money laundering procedures.