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BUSINESSES HIT BY PHONE FRAUD MAD AT TELECOM COMPANIES; WANT POLITICAL ACTION

Posted on February 24, 2009

      Frustrated companies facing crippling bills totalling hundreds of thousands of dollars for phone calls made fraudulently through their voice-mail systems say they are getting little satisfaction trying to straighten out the costly mess.

      While winning forgiveness for the bills is their top priority, they say the telecom industry must put in place safeguards to protect customers, or else Ottawa should order them to do so.

      "The credit cards and the banks have certainly put in technology where things are not as easily taken as they once were - they're constantly evolving as technology progresses whereas Bell is not," said Leah May, officer manager at law firm Martin and Hillyer in Burlington, Ont.

      "They're just forcing victims to pay for it, and where's the consequence to them?"

      Bell Canada's 38-page bill to May's firm was for more than $207,000 worth of calls to Sierra Leone. Bell offered to halve the amount.

      "That's just not good enough," May said. "We're screaming out loud that we've been victimized."

      Phone companies maintain customers must ensure their phone systems are protected from what Bell calls "experienced criminals."

      "Remember that you are responsible for paying for all calls originating from, and charged calls accepted at, your telephone, regardless of who made or accepted them," Bell vice-president Peter Kerr wrote to lawyer John Ford in Oakville, Ont., this month.

      In Oakville, GPS Consulting Group and Insurance Agencies had its Bell-installed system hacked to the tune of $76,000 for calls to Austria - even after following advice to change voice-mail passwords.

      Bell initially said it would take $60,400 but eventually agreed to accept $7,100 after threatening to cut off the lines That's still too much, said the firm's Gord Cowan.

      "It's anguish. It's cost us thousands and thousands of dollars of time fighting this," said Cowan, who wants the legislation changed.

      "These small companies, through a federally regulated company, are being brought to their knees. They'll put us out of business."

      The Commissioner for Complaints for Telecommunications Services, an independent non-profit agency funded by phone companies, said Bell would not disconnect service during the dispute and resolution phase.

      "The main focus of this has been southern Ontario, but I'm not persuaded it's going to stay there," said complaints commissioner Howard Maker.

      Maker said each case requires investigating such issues as the equipment involved, training, the long-distance carrier, the security measures, and the contractual relationships.

      "There are levels of complexities and differences in each of these cases," Maker said, adding phone companies also feel victimized but are reconsidering how they deal with such complaints.

      Phone "phreaking" occurs when criminals gain access to a voice-mail system by cracking the password and using the hijacked phone line for calls to countries such as Sierra Leone, Zimbabwe or Liechtenstein.

      Kelly Wilson, owner of a Hamilton-area accounting business that was hit with $7,200 in long-distance charges, said she has been stymied in finding answers. On one occasion in December, 84 calls totalling more than 18 hours were made in a two-hour span. According to the bill, multiple calls were made to the same number at the same time.

      "How is this possible?" said Kelly, whose bank account was debited by Bell despite promises the charges would not be put through.

      Her new bill this past week showed Bell had reversed $1,400, still leaving her with $5,800 in bad charges.

      A Winnipeg business, HUB Computer Solutions, is still battling its $52,000 January bill from Manitoba Telecom Services for hundreds of calls to Bulgaria.

      "I just wish it would just go away," said HUB's Alan Davison, who said there is no insurance against this potentially bankrupting fraud.

      Caroline Chassels, who runs a small computer company in Toronto, said Bell offered to take $50,000 off their $150,000 bill for calls to Sierra Leone last fall.

      "The argument that paying a $100,000 phone bill would put our company at risk of bankruptcy did nothing to sway the Bell executives from their insistence that we are responsible for protecting our phone lines," Chassels said.

      "At the crux of the problem is Bell's infrastructure that enables hackers to turn four lines into 200 lines that are billed for continuous phone calls."

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