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Last Updated: Friday, 11 November 2005, 10:13 GMT
The Great Phone Call Con
By Terry Messenger
BBC Money Programme

When Sallyann Taylor got a phone call from BT in August last year, a nightmare began.

The voice on the other end told her there had been "unusually high activity" on her telephone line - resulting in a bill of more than 500.

Sallyann Taylor
Ms Taylor is determined not to give in
She was shocked and baffled.

When the bill arrived a few days later, she discovered that she was being charged nearly 440 for mysterious calls to expensive premium rate 090 numbers.

"I was horrified. My first thought was how can I pay it and how has it happened? I just didn't know how my bill could have gone up so high so quickly," says Ms Taylor.

Rogue dialler

Ms Taylor, from Lytham in Lancashire, learned from BT that she may have been the victim of a massive telecom fraud known as rogue dialling - along with up to 80,000 others in the UK.

How does it work?
Legitimate diallers are used by web companies to sell internet entertainment to consumers who knowingly connect to certain websites, which charge for the service, often pornography, through 090 numbers
Calls to 090 lines cost up to 1.50 per minute, or 90 per hour, and whether consumers are crime victims or ordinary users of legitimate services, BT requires all to pay up
Under the usual agreed share out, BT takes 1.80p of the 90 hourly rate, middlemen who lease out 090 lines take around 20, and the service providers, who are supposed to be selling the entertainment, take 68.20

Rogue dialling occurs when criminal telecom companies hi-jack people's computers, switching their internet connections from cheap local lines to expensive premium rate service or PRS numbers, usually linked to porn sites.

Typically victims are caught when they close internet pop ups inviting them to view pornography.

Closing the pop up enables the fraudsters to install "rogue dialler" software, which makes calls to 090 numbers at all times of the night and day from users phone lines without their knowledge or consent.

Ms Taylor and other complainants were warned by BT and other big networks that they had no choice but to pay up regardless of whether they were victims of a crime.

Shocked, Ms Taylor declares: "I just thought I can't afford to pay it. Why should I pay it? It's not me that made these calls. It's a scam and I'm not going to pay it."

She paid only the charges she could account for and refused to pay for calls to the 090 lines. And so began a bizarre and disturbing series of events, with Ms Taylor being denied help at every turn - from BT, the police and telecoms regulators.

Now she faces court action herself after BT threatened to sue her for unpaid charges, although she argues she's the victim not the perpetrator.

And BT is threatening legal action against up to 800 others also refusing to pay.


When Ms Taylor, and the other 80,000 complained to BT, they were told to go to the industry regulators.

The most successful fraudsters have a capacity to look us in the eye, to engage our trust and then betray it without a qualm

And most of them did.

The regulator is called the Independent Committee for the Supervision of Standards of Telephone Information Services - or ICSTIS for short.

ICSTIS collapsed under the weight of all the complaints, as no less than 60,000 people jammed its helplines, ringing again and again, desperate to seek advice.

At the peak of the crisis in the summer of last year, the organisation received 85,000 calls in a single day and was only able to answer 400.

"The effect in the summer of 2004, if I was over-dramatic, I would describe as meltdown," says ICSTIS director George Kidd.

But even if consumers had got through, the chances are that ICSTIS would not have been much help.

The organisation gave complainants addresses for the service providers which charged them and told them to get onto them - in other words to ask the rogues for a refund.

The organisation investigated and proved allegations of rogue dialling against 17 companies, mostly based abroad.

Fines were levied and some companies were barred from running PRS lines.

'Send us your details'

The BBC Money Programme has identified one of the chief suspects in the rogue dialler scandal in an investigation into telecom fraud.

Money Programme reporter Rajan Datar is escorted from the premises of a company suspected of involvement in the theft of millions from phone customers
Reporter Rajan Datar's investigation was not welcomed

He is Danish businessman Morten Sondergaard Pedersen, 38, director of Premium Media Communications (PMC) and Sun Telecom, two firms based at the same address in Majorca.

Ms Taylor and 11,000 other complainants were charged by a ring of five companies based in Palma, Majorca, some sharing the same registered address.

Twenty per cent of the total number of complaints to ICSTIS about rogue dialling involved the Majorca companies.

PMC supplied technology to all five and took it upon itself to answer complaints from consumers.

ICSTIS investigated PMC and the other Majorca firms and decided there was insufficient evidence to take action against them.

Without giving them any backing, ICSTIS advised Ms Taylor and the other 11,000 to write to Majorca for their money.

Ms Taylor did write and got a letter back demanding full bank account details and a copy of her passport before her claim could be investigated.

Fearing she would be fleeced again, she declined.

Sun Telecom, meanwhile, had been involved in a massive rogue dialler swindle in Germany netting over 3m euros.

Last December, Mattias Meidow, a minor player in the fraud was convicted and a European arrest warrant for Mr Pedersen, believing him to be the brains behind the plot.

When Money Programme reporter Rajan Datar visited PMC, he was told that Mr Pedersen was away travelling.

In fact, Mr Pedersen had been arrested and his only travel plans involved extradition to Germany to face charges of masterminding the swindle.

Not giving in

ICSTIS curbed rogue dialling by the end of last year by introducing a scheme whereby service providers wishing to charge for internet entertainment on 090 numbers were vetted and licensed.

BT phone bill
There is no legal reason why the calls should not be paid for
BT spokesman

But that was only after an estimated 10m was stolen from UK consumers.

And under that scheme, at the same time as the German authorities were investigating Mr Pedersen, ICSTIS gave the Majorca firms license to carry on.

"I don't think it was known to my staff in dealing with these Spanish companies by their brand names, if you like, who was sitting behind them, but to the extent that somebody was, my point would be these companies were not companies - following the investigations that we carried out - that we could prove had done anything wrong," says Mr Kidd.

"If ICSTIS say they're legitimate and have given them a licence to carry on, then they're fools," counters Ms Taylor, who has not heard back from the police after she reported the matter in December 2004.

Meanwhile, she is awaiting her day in court, adamant that she is not going to give in to BT.

Manchester solicitor Stuart Shalom has set up a group to press BT to cancel the charges and pay out refunds.

In fact, practically everybody in the country has been targeted by the phone sharks - through their landlines, mobiles and computers.

DCI Colin Cowan of the City of London Police Economic Crime Unit reckons the scamsters are raking in tens of millions of pounds: "If you've got a mobile phone or if you've got a landline telephone then you've certainly been targeted."

A spokesman for the telecoms giant says: "BT and other operators simply act as a conduit for the telephone calls and to that extent if someone's phone uses the network.

"There is no legal reason why the calls should not be paid for."

The Money Programme - The Great Phone Call Con: BBC TWO at 7pm on Friday 11 November.

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