3 Proactive Steps to Minimize Your Risk of Pay Phone Fraud

Leo Berz

Any company looking to control expenses should review their telecom costs and be sure to be on the lookout for possible telephone fraud. Telephone fraud has been around longer than most of us can remember and over the years we have seen many kinds of telephone fraud scams come and go. During the past six months we have identified a significant increase in pay phone fraud across our client base. Just last week a D.C. man was convicted for stealing over $4 Million from 10 large corporations and government agencies over a six-year period.

Pay phone fraud was made possible by the Telecom Reform Act of 1996 which mandates a surcharge on every toll-free call placed from a pay phone. A growing number of pay phone operators have found that they can make money fraudulently by using auto-dialers to place toll-free calls which cost the recipient $.55 for each call. This can add up to charges of over $50,000 per month per pay phone.

The proliferation of cell phones has all but eliminated the need to use pay phones, and operators have hundreds of phones that get little or no use. Additionally, many states such as Florida have loosened their regulations and in some cases will allow you to install a pay phone in your home. This makes scams like this easier to accomplish.

You can greatly minimize your risk of this kind of pay phone fraud by taking a few proactive steps.

  1. Cancel any unused toll-free numbers to reduce your overall exposure.
  2. Consider putting pay phone access restrictions on your numbers; unless you are a “Business to Consumer” business.
  3. Monitor pay phone surcharges on your long distance bill each month and immediately report any suspicious increase to your provider’s toll fraud security center.

By taking these simple steps you can avoid becoming the next victim of this growing scam.

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