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According to Billing World magazine, as of 2004 "up to 10 percent of a carrier’s bottom line is lost to simple subscription fraud and other low-tech scams, such as when criminals sign up for service using fake names."

1 Types of frauds

1.1 Fraud against users

1.1.1 Frauds against users by phone companies

• Cramming is the addition of expensive services to a subscriber's telephone bill which were neither ordered nor desired by the client, often by dishonest third-party suppliers of data and communication service.

• Slamming is any fraudulent, unauthorised change to the default long-distance carrier selection for a subscriber's line, most often made by dishonest vendors desirous to steal business from competing long-distance providers.

1.1.2 Fraud against customers by third parties

• PBX dial through can be used fraudulently by placing a call to a business and then requesting to be transferred to "9-0" or some other outside toll number. (9 is normally an outside line and 0 then connects to the utility's operator) The call appears to originate from the business (instead of the original fraudulent caller) and appears on the company 'phone bill. Trickery (such as impersonation of installers and telco personnel "testing the system") or bribery and collusion with dishonest employees inside the firm may be used to gain access.

• Autodialers may be used for a number of dishonest purposes, including telemarketing fraud or even as wardialers . Wardialers take their name from a scene in the early-1980's movie War Games in which a 'cracker' programmes a home computer to dial every number in an exchange, searching for lines with auto-answer data modems . Sequential dialing is easy to detect, pseudo-random dialing is not. One more recent variant involves claiming to be a COCOT customer-owned coin-operated telephone vendor, connecting an autodialer to what should have been a payphone line, dialing an assorted series of toll-free "wrong numbers" (such as +1-800 in US, which effectively reverses the charges) and then demanding that the called parties reimburse the fraudulent COCOT provider for the cost of "calls received from a payphone".

• Dialer programmes containing malware or malicious code have been used to cause personal computers to disconnect from an existing legitimate local provider and instead dial into a premium (usually overseas) number. The first of these used a Moldovan 'phone number

• Pre-pay cards and "calling cards" are also very vulnerable to fraudulent use; these cards contain a number or passcode which can be dialed in order to bill worldwide toll calls to the card. Anyone who obtains the passcode can dishonestly misuse it to make or to resell toll calls.

• 809 scams take their name from the former +1 (809) area code which used to cover most of the Caribbean nations (it has since been split into multiple new area codes, adding to the confusion). The numbers *look* like Canadian or US telephone numbers but turn out to be costly, overpriced international calls. Entire Caribbean 'phone exchanges (such as +1-876-HOT-..., +1-876-WET-... or +1-876-SEX-... numbers in Jamaica, plus numbers in Antigua, Montserrat and a number of other Caribbean or overseas countries) are used to bypass consumer protection laws which govern premium numbers and phone sex operations such as +1-900 or 976 services in the victim's home country. Other variants on this scheme involve leaving messages on pagers or making bogus claims of being a relative in a family emergency to trick users into calling the foreign numbers, then attempting to keep the victim on the line as long as possible in order to incur the cost of an expensive foreign call.

• The 10xxx or 1010xxx codes used to select an alternate long-distance carrier on a per-call basis were also widely misused by phone sex scammers and spammers in the early days of competitive long distance; the phone-sex operations would misrepresent themselves as alternate long-distance carriers to evade consumer protection measures which prevent US 'phone subscribers from losing local or long-distance service due to calls to +1-900 or 976 premium numbers. This practice has largely been replaced by the misuse of numbers in former +1-809 countries or other overseas numbers as cash-strapped governments in many poorer nations are willing to condone the practice.

• Telemarketing fraud takes a number of forms; much like mail fraudMail fraud refers to any scheme which attempts to unlawfully obtain money or valuables in which the mails are used at any point in the commission of a criminal offence. Non-delivery or misrepresentation of mail-order merchandise This scheme exists in vari, solititations for the sale of goods or investments which are never delivered or worthless and requests for donations to bogus unregistered charities are not uncommon. Callers often prey upon sickSick is a humor magazine, an imitator of the popular MAD Magazine''. It was created by Joe Simon (creator of Captain America) and debuted in 1960, lasting until the late 1970s. Sick's mascot was a doppelganger of Alfred E. Neuman called Huckleberry Fink. and elderly persons; scams in which a caller attempts to obtain banking or credit cardA credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer loans the consumer money rathe information also frequently occur. One other variant involves calling a number of business offices, asking for model numbers of various pieces of office equipment in use (such as photocopiers) and then sending unsolicited shipments of supplies for the machines then billing the victims at artificially inflated prices.