What is Toll Free Telecom Fraud?

Telecom fraud remains a significant problem for any business that relies on phone systems. Fraudsters continue to develop new and difficult to deter schemes. One of the latest to hit the news is Toll Free Telecom Fraud. Toll Free fraud can affect any business that uses a toll free number. For many businesses, this type of fraud is impossible to completely stop.

Let’s take a look at how it works. First, a fraudster will typically make a profit sharing agreement with a CLEC. He will then use VoIP technology to make multiple calls to a toll free number—often that of a large corporation. The CLEC will perform a dip to the SMS 800 database, and then transfer the call to another network for termination, earning something like 1.5 cents per minute in switched originating access fees.

The fraudster will then navigate the automated IVR prompts, avoiding connecting to a live operator. These calls are often left up for hours at a time, and automated so multiple calls will be made at once. When large companies, like financial institutions, are targeted, they frequently don’t even notice the huge charges racked up by toll free fraud, even though they are expensive, long calls.

The true problem to this type of fraud is that it is difficult to put a stop to. Most companies are faced with the options of either turning off service to the 800 number or contacting the FBI. As 800 numbers are often important customer service numbers, most companies cannot afford to ut off the service. Companies are increasingly going to the FBI for help in stopping these criminals and for proof that they have profit sharing agreements with CLECs.