[Congressional Record Volume 142, Number 75 (Friday, May 24, 1996)]
[Extensions of Remarks]
[Pages E897-E898]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    END TELECOMMUNICATIONS FRAUD NOW

                                 ______


                           HON. BILL McCOLLUM

                               of florida

                    in the house of representatives

                         Thursday, May 23, 1996

  Mr. McCOLLUM. Mr. Speaker, I rise to alert my colleagues and the 
American people to the growing nationwide problem of telecommunications 
fraud. Last month, as chairman of the Subcommittee on Crime, I 
conducted hearings on telemarketing fraud against the elderly, and the 
tremendous toll that it takes. Telemarketing fraud is just one aspect 
of the telecommunications scheme and the elderly are not its only 
victims.
  Telecommunications fraud can manifest itself in several forms 
including crimes like ``shoulder surfing,'' where criminals literally 
look over the shoulder of unsuspecting victims entering their calling 
card number on a payphone. These victims are often unsuspecting 
tourists in a crowded airport, hotel lobby, or shopping mall who use a 
pay telephone for a long distance call. The criminal then can use their 
calling card number himself/herself or it or sell it later, costing the 
victim or phone company hundreds or thousands of dollars.
  Criminals have also been known to pose as law enforcement officials, 
and approach elderly citizens claiming they need to bill a call to a 
residential number as part of an investigation. As cellular technology 
has progressed, so has the criminal methods. For example, cloning 
devices are used to steal cellular phone serial numbers from the radio 
waves that carry the phone signal. These unique codes are used to 
charge thousands of dollars of calls to the accounts of innocent phone 
users.
  Telecommunications fraud affects millions of Americans each year, and 
the damage done is appalling. This year alone telecommunications fraud 
is expected to reach $3.7 billion, an increase of $395 million from 
1995. A survey of over 90 businesses who were victims of 
telecommunications fraud found that the losses ranged from a few 
thousand dollars to $4 million. The amount of long distance charges 
stolen through business equipment in the United States is around $1.5 
billion. The cost to telephone users in ``800'' line charges, run up by 
thieves and attempted thieves, is estimated to reach a minimum of $215 
million this year.
  We must stop these criminals and protect Americans from this 
deceptively simple fraud. Mr. Speaker, in my home State of Florida many 
elderly citizens have come to retire comfortably, and many tourists 
visit our attractions, especially now as the summer season is about to 
begin. When they pick up the phone

[[Page E898]]

and place a call, they should not have to worry about someone stealing 
from them. We must end telecommunications fraud and stop these 
criminals cold.
  Twelve telecommunications companies have come together to fight this 
crime and to enhance public awareness through the Alliance to Outfox 
Phone Fraud. Their education efforts have gone beyond their service 
areas and reach out to make the national and international community 
aware of this problem and how to deal with it. Besides public service 
announcements, the alliance has launched a full campaign to include 
brochures, posters, and even a toll free number to encourage 
telecommunications customers to educate themselves and join the 
campaign.
  We in Congress must learn from efforts like this to help Americans 
become aware of this problem so they can avoid becoming victims of 
crime.

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