The telephone has been and remains one of the most important communication tools ever created, and its vast potential obviously opened a vector for both legitimate businesses and all sorts of scams and tricks. The goal is always the same: to get an extra buck, or some expensive service for free. Television and computers have used and abused the telephone for nefarious purposes, and if we look closely, we'll notice the trend still exists, though it has certainly changed completely.
The First Telephone Frauds
Here's a rundown of the most famous examples, including the CDs of a certain company that, while legal, made us cry with pain. Once upon a time... in the late 1950s. Although the patent granted to Alexander Graham Bell for the telephone was granted in the 19th century, in the '50s the telephone was still more of a luxury than a basic service. There are countless examples in books and films where someone had to go to the "village store" or a distant neighbor's farm to make a call.
But setting fiction aside, somewhere in 1957 we meet an eight-year-old boy named Josef Carl Engressia Jr., who was born blind. At the age of four, Engressia became fascinated with telephones. At five, he discovered he could dial numbers by “tapping” the hang-up switch on those phones with protected or unusable dials.
However, Engressia had perfect pitch, and at age seven he discovered that by whistling a certain tone (2600 Hz), he could activate Bell's automatic switches, and after extensive exploration of the system, find a way to make free phone calls. An extraordinary genius marked by his blindness and the abuse he suffered as a child, Engressia (who legally adopted the name “Joybubbles”) changed the history of telephony, and other titans of computing like Steve Wozniak took him as inspiration.
The phenomenon of “phreaking” and the birth of the famous “color boxes” were perhaps the original reason why telephone companies opened their nuclear silos and began hunting down all those who practiced it in one way or another. Engressia, the famous Captain Crunch (Joe Drapper) with the cereal whistle, and many other experts of the era were arrested and convicted on charges of fraud, regardless of the fact that they were “exploring” the system and not “exploiting” it.
For the companies, they were making free phone calls, so they were “stealing telephone”, when in reality it was the system's own vulnerabilities that allowed this. At the same time, others much less scrupulous were captured and made a real mess with this knowledge. But Joybubbles? He just wanted to work for Bell, not ruin it.
Premium-Rate Numbers
Of course, phone fraud went much further, and didn't necessarily stay on the technological side of the fence. The offer of “special services” through “premium-rate numbers” has been with us for decades. Television shows, both old and current, have resorted to these numbers to profit from calls. While premium numbers are technically legal, the questionable part has been the way they've been used.
There are reported cases from the '80s where some TV commercials tempted young children to “play” with the phone, telling them to dial a number to start. That's how unsuspecting parents found astronomical sums on their phone bills, all because there were no restrictions on these numbers. Even an episode of 'The Simpsons' shows this, when Lisa has trouble with Corey's 'hotline'.
Dial-Up Frauds
As some may imagine, the encounter between phone lines and computers was inevitable. The technical history of modems goes back to 1920, but the real “explosion” of modems came with the “Smartmodem” introduced in 1981, the same year when, by cosmic coincidence (or maybe not so much), the IBM PC appeared. Design improved, speed increased, there was even a protocol war in between (K56Flex versus X2), and eventually we reached Internet connection through 'dial-up' services. Remember that? Well, that noise accompanied us for years, but we also had to deal with the infamous “dialers”. A “dialer” or “autodialer” is nothing more than a device designed to dial numbers automatically.
We saw a great example in the movie WarGames, and there's another excellent episode of 'The Simpsons' where Homer gets one of these ruthless machines and starts a telemarketing fraud, another variant of phone fraud. But at the computing level, the dialer became a very annoying form of malware. The dialer came disguised as some security program or a certain “free service”.
By accepting the access, the user exposed their system to the installation of a malicious program that automatically configured a phone connection to a high-cost premium number by default, and there were even versions that disabled the modem sound to camouflage their remote connection. A computer could spend hours connected to a premium-number and long-distance call, so the amount on the phone bill was the only tangible clue for the user that something was wrong with their connection. Dialers proved to be very complex bugs to eradicate.
The Storm Called America Online
Although this doesn't fall under phone fraud, it's an event that pushed the patience of millions of users to the limit, and the definition of “commercial abuse”. The nightmare ended in 2006, but before that, floppy disks at first (around July 1993) and CDs later, flooded mailboxes, newspapers, stores, and basically any place where they could be offered.
I personally remember that appliance stores that were just starting to offer computers placed a stand where people could take the CDs at their own will. With the promise of dozens, hundreds, even thousands of free hours on the Internet, America Online CDs took over the entire planet. Official sources acknowledge that at one point, half of the world's optical disc production ended up with the America Online logo on its surface.
There were basically two problems: people misinterpreted the concept of “free”, and the software on those CDs was truly awful. Upon reading “1000 hours of free Internet”, more than a few assumed that connecting “cost nothing”, when in reality the free part was Internet access, not making the call. As for the software, well... I can only say that before writing for NeoTeo and other media, my technical service job was simplified to dealing with dozens of computers reduced to a poor digital mass of “nothing”, due to the proprietary dialer that AOL placed on those CDs.
What's most disturbing? It was a perfectly planned campaign. Steve Case, former CEO of America Online at the time, commented on Quora that in the '90s, the goal was to spend up to ten percent of the profit obtained from the average subscription duration. That average was twenty-five months, adding up to about $350 in profit, so America Online calculated spending about $35 per potential customer. Jan Brandt, another former CEO, offered a figure: $300 million, which we assume is only for the United States. The number of CDs? Conveniently, there's no official data on that, but some estimates place the figure at more than a billion discs.
Mobile Phones and Neo-Fraud
With the arrival of broadband, the effectiveness of the dialer as a tool for fraud is limited to those systems that still rely on a phone connection to access the Web. All that's left of “dialing” in ADSL is the word (since it's more of a 'login'), while the cable modem has no relation to it. But with the advance of mobile telephony, the forms of scam have also adapted. Who hasn't come across an ad offering poems, love advice, naked celebrity photos, and other things to your mobile, just by sending a message?
These “services” work very similarly to premium numbers, with the difference that they alter the price (well above the nominal rate) of the messages. Upon noticing the deception, the user continues sending messages to cancel, feeding the scam and quickly consuming their credit. I've witnessed several cases where people were forced to cancel their mobile line and replace it with a different number because of this kind of horror.
For a long time now, there's been a trend indicating a decline in conventional phone lines, in favor of mobile and IP telephony. Technology changes, but so will scams and deception. There's no alternative but to stay alert, and that includes anyone who wants to bathe in the spirit of those telephony pioneers and decide to find out how the system works. Companies have become merciless and are capable of detecting many disturbances on a line. No matter which side of the fence you're on, be careful.
