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Toll Fraud and Telabuse.

Criminals have discovered that loopholes in the security of our telecommunications infrastructure allow them to steal millions of dollars in free calls with little risk. Virtually every business and many individuals have been victimized by toll fraud and telabuse.

The difficulty of investigating the cases, the cost of the technical "fixes," and the frequent low priority given the cases by law enforcement and prosecutors have left the door to telecommunications fraud ajar, if not wide open. In Toll Fraud and Telabuse, readers are given an overview of the problem and tips on how best to stay out of harm's way.

Although the authors unfortunately lessen the book's value by editorializing, the publication is wonderfully worded in simple, easy-to-understand language. It is an articulate summation of the whole telecommunications fraud problem.

Despite the magnitude of the problem, Toll Fraud is the first comprehensive summary of the issue, including the extent of the losses and the means used by criminals to execute their schemes. The authors estimate that toll fraud in all its versions caused losses of $4 billion in 1991 and the abuse of private phone systems by insiders (telabuse) led to losses of another $5 billion. They note that, despite some possible preventive measures, people can do everything by the book and still be victimized by a major financial loss.

The authors discuss the 1984 breakup of the Bell System along with many other issues, including growth of competition in public branch exchanges (PBXs), long distance, customer-owned coin telephones, and cellular phones. Corporate downsizing, the authors say, resulted in substantially fewer security personnel in most local phone companies and some long-distance companies at the very time the fraud problems were escalating at an exponential rate. As they note, the new PBX manufacturers spent "millions developing innovative and efficient equipment and 25 cents on security."

The result was that outsiders gained access to corporate PBX facilities across America and seized lines through use of purloined codes and other means, leaving the PBX owners with fraudulent toll charges, which in some cases approached $500,000.

Liability for such losses traditionally lies with the local phone customer under a series of decisions known as the "house guest" scenario. If a local telephone customer allows "guests" to use his or her home and thereby access to the phone, then the courts and commissions have held the customer liable for all charges the guest may have created.

Whether that doctrine should be applied to the fraudulent use of PBXs by outsiders is currently the subject of hearings by the Federal Communications Commission and others. The authors document both sides of the argument by including briefs and comments from PBX owners, local exchange carriers, and long-distance companies.

They should have stopped there. Instead, the authors chose to take sides in the issue, generally on behalf of the PBX owners. They went so far as to propose solutions that the FCC and others should consider. In fact, the authors expressed their opinions throughout the book, even labeling one chapter "AT&T's Ambivalent Attitude," which could hardly be portrayed as an evenhanded look at the problem.

Another chapter is labeled, "The Pacific Mutual Proceeding: What We Think Should Happen." The authors lost credibility by editorializing throughout the text rather than presenting readers with an objective look at a serious situation.

The two-volume book covers more than 700 pages of materials dealing with PBX fraud, credit card fraud, cellular fraud, customer-owned coin phone fraud, "blue box" type fraud, computer hackers, "war dialers," retailing of stolen long distance, and other topics.

The work is so complete and up-to-date it could even be put in a ring binder so that periodic updates could be provided by the publisher as developments occur.

On balance, the book is worthwhile. It will be a valuable tool for those concerned about the safety and security of their phones and computers. That should be just about everyone.

Reviewer: Edwin P. McKaskel, CPP, is division manager for asset protection at Southwestern Bell Telephone in St. Louis and a member of the ASIS Standing Committee on Telecommunications Security.
COPYRIGHT 1992 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:McKaskel, Edwin P.
Publication:Security Management
Article Type:Book Review
Date:Dec 1, 1992
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