Phone Scam Central

The Port Authority Bus Terminal in midtown Manhattan is a busy place -- a little too busy, as far as AT&T is concerned. In recent years the terminal's seedy lobby has become a favorite gathering spot for "phone scammers," con artists who sell overseas calls at cut rates using other people's telephone- charge-card numbers. In 1990 some $11 million in fraudulent calls originated from the bus terminal's pay phones alone, according to a report in the New York Daily News -- more than $30,000 worth every day.

The same scam plays out at countless public phones, not just in New York City but in Los Angeles, Chicago, Miami and Washington as well. Someone picks up a credit-card number, often by looking over a legitimate user's shoulder or listening in on a charge call placed at a rotary phone. A working number can fetch $50 to $100 from a middleman, who then retails it to long lines of customers eager to pay $5 to $15 to call friends and relatives in, say, Colombia, Poland or the Philippines. A single number can quickly run up a tab in the tens of thousands of dollars, which is charged to the card's owner but is usually absorbed by the phone company. Total losses last year from these and other phone frauds, according to the Secret Service: $1.2 billion.

Long-distance-service providers have gone to elaborate lengths to stem the hemorrhaging, but the problem is getting worse, not better. One of the fastest growing schemes involves gaining access to corporate voice-mail systems and private branch exchanges (PBXs) that allow employees to make long-distance calls from remote locations. A clever scammer can dial into a company's PBX, take control of an extension and use it to call anywhere in the world. The fraud doesn't show up until the company is billed, 30 to 60 days later. )