There are four phone lines installed at Rod Bell's small Toronto-based marketing firm. Its monthly phone bill is usually about $250 a month.
In August, it came in at $60,000.
Mr. Bell's 250-page phone bill – filled with 30-minute calls to the same handful of numbers in places such as Germany and Britain – is an especially egregious case of what is commonly called toll fraud.
Fraudsters set up revenue-generating numbers around the world –similar to 1-900 numbers in North America – and then hack into phone systems in places such as Canada; they use those phones to call the money-maker lines over and over again, racking up fees as they do.
By the time the scam is discovered, the fraudsters have already collected the money from overseas carriers. Those carriers turn to local phone companies such as Bell, Rogers and Telus to collect, who in turn, bill the victims of the toll fraud.
The scope of toll fraud scams is often massive. Last summer, authorities in several countries helped bust one ring that stretched from Italy to the Philippines.
According to an indictment, a couple who operated a call centre in Italy paid a group of hackers in Manila to hack into phone systems in the United States.
Once the hackers managed to compromise the phone systems, they allegedly dialled out to numbers run by the call centre, using a technique that allowed for multiple simultaneous calls from every phone. The end result, according to the indictment, was a grand total of 12 million minutes of calling time – resulting in $55-million (U.S.) in telephone charges.
In part because small businesses such as Mr. Bell's use telephone equipment from companies other than their carrier, the carriers maintain that toll-fraud prevention is squarely the responsibility of the customer.
That left Mr. Bell, who does not use Telus phone equipment, with a bill from the carrier that ballooned to almost $70,000 after taxes and late fees.
Phone companies have launched several campaigns warning businesses about toll fraud. Bell spokeswoman Julie Smithers said that as a result of those efforts, the company has seen the number of such fraud cases drop in recent years. But ultimately, she said, the responsibility for such fraud rests with the customer.
“What's difficult is that the phone service provider must pay their international long distance partners [for the calls],” Ms. Smithers said. “They never let us off the hook when there's a situation like that.”
While carriers may reimburse customers in cases where the actual compromised phone systems were purchased from the same phone company, they will almost always refuse to do so when the customers get their phone equipment from elsewhere – as is the case with Mr. Bell's business.
Mr. Bell said Telus contacted his company in August (just before the July bill came in for about $4,000, indicating the scam began in the last few days of that month) to tell him his phone system may have been compromised. Telus suggested several measures, such as changing the passwords on the voice-mail system, Mr. Bell said; he followed those suggestions. But when the August bill came in at more than $63,000, it was clear the fraud hadn't stopped.
Telus spokesman Jim Johannsson said the company often will work with large customers to reduce costs in these cases, even when the phone hardware isn't provided by Telus. In Mr. Bell's case, the company has already worked out a “substantial adjustment” to the bill, though he couldn't say exactly how much without the customer's permission. Mr. Bell said it amounted to a reduction to about $32,000 from almost $70,000.
Still, Mr. Bell refuses to pay, even if it means going to court.
“The funny thing is that they still haven't cut off our long distance,” he said. “We keep on paying just the amount that we use.”
