Wireless PCS Fraud



Q. How are fraudulent calls made?

There are different techniques, but in essence the criminal takes apart a wireless telephone and reprograms it with a counterfeit account code (ESN/MIN pair), which tricks a wireless system into sending the bill elsewhere.

Q. Does the customer get stuck with the bill if someone fraudulently uses his or her account?

No. It has been the policy of wireless carriers to remove fraudulent charges from the accounts of customers. However, it's important to remember that wireless fraud is not a victimless crime. It adds to the cost of doing business, and legitimate customers are inconvenienced.

Q. How big is the wireless telecommunications fraud problem?

In 1997, the wireless industry lost $434 million due to fraud. The losses for 1997 represent 1.4 percent of total industry revenues. It is estimated that losses for 1998 were 182 million or .05% of industry revenues.

Q. What is the industry doing to stop fraud?

Wireless carriers are waging a high-tech war against high-tech criminals. They are attacking on several fronts. The industry supports field investigations of criminal operations; education programs for law enforcement and carrier personnel; strengthening legal sanction; and research into new technological solutions including: Radio Frequency Fingerprinting, Personal Identification numbers, Roamer Verification, Reinstatement Profile and Authentication.

Q. Is the fraudulent activity only in the big markets?

No. While the bulk of the problem is in bigger cities such as New York , Miami, and Los Angeles, wireless fraud can take place anywhere.

Q. Is it illegal to tamper with a wireless phone?

On October 25, 1994, H.R. 4922 was signed into law by President Clinton. Amendments to Section 1029 now include the fraudulent alteration of telecommunications instruments and equipment. Punishment includes fines of up to $50,000 and 15 years imprisonment. Additionally, the rules and regulations of the Federal Communications Commission prohibit tampering with and/or altering the Electronic Serial Number (ESN) inside a wireless telephone. Every wireless phone must have a unique ESN and no two phones may have or emit the same ESN, according to FCC rules. On April 24, 1998 President Clinton signed Senate Bill 493 making it a violation of Title 18, Section 1029 to knowingly use, produce, or traffic in or have control of or custody of, or possess hardware or software to counterfeit wireless phones.

Q. Who helps the industry on the law enforcement side?

Local, county, state and federal police agencies, depending on the case and location. On the federal side, most federal assistance comes from the United States Secret Service in the U.S. and the Royal Canadian Mounted Police in Canada because wireless fraud involves electronic counterfeiting. Other federal agencies now pursuing these cases include the FBI, Drug Enforcement Administration and U.S. Customs.

Wireless Telephone Fraud Consumer Tips

All wireless phone users should know that fraud can be prevented at the consumer level, both in terms of prevention and detection.

Consumers can help prevent fraud by:

• Locking phones or removing handsets and wireless antennas (to avoid drawing attention to the vehicle) every time a vehicle is left with someone, like a parking lot attendant or mechanic;
• Protecting sensitive documents such as subscriber agreements, which include electronic serial numbers;
• Immediately reporting a stolen phone to the wireless phone carrier;
• Not leaving their phone in an unattended car in an isolated or questionable area or parking lot for an extended period of time; locking the phone out of sight; and using the lock code.

Consumers can help detect fraud by:

• Looking for unusual call activity on their monthly wireless phone bill;
• Reporting frequent receipt of wrong numbers or hang ups on the wireless phone, which may indicate someone else is using their mobile number;
• Asking the wireless provider to eliminate overseas toll or North American toll (long distance) dialing capabilities if the customer does not intend to call long distance.
• If a wireless subscriber suspects fraud, he or she should immediately contact the wireless phone company.

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