Who Is Really Behind The Rogue Dialer Scams?

A tip from a reader (thanks, James) indicates we’re back on the trail of the rogue dialers. (Rogue dialers are pieces of software usually downloaded without the user’s knowledge, which then disconnect existing Internet connections and dial fresh connections via high-cost usually international numbers. The user doesn’t know much about it until the monthly phone bill arrives with a hefty jump.) A piece on TheWMURChannel (via AP) says Missouri’s attorney general has filed suit against a New Hampshire man, Michael Walczak,  and his businesses —  Phoenix One Billing LLC and National One Telecom Inc — accusing him “of charging Missourians for accessing pornographic Web sites they never visited”:

The suit accuses Walczak of demanding payment from at least 59 Missouri customers for long-distance calls to foreign countries that weren’t made and for accessing pay-per-view adult Web sites. Nixon said it appeared the charges sometimes came from auto-dialing software installed on people’s computers without their knowledge.

Walczak is accused of deception, fraud and unfair trade practices. Nixon wants the Jackson County Circuit Court to order the people wrongly charged be paid back, to block Walczak from engaging in unfair trade practices and to impose a fine of $1,000 per violation.

Walczak doesn’t sound like a big fish, although National One, one of the companies he is allegedly involved in, did catch some big ones. This article in the Union Leader describes him thus (go here for the full piece; the January original has been archived):

Walczak is a 2000 graduate from Manchester West High School and uses his parent’s Horizon Drive address in Bedford as his business address. He graduated from Daniel Webster College last year with a degree in information systems. John Zahr, a class officer of the West 2000 class, said Walczak was a smart kid who took advanced-level classes. “All I could really tell you, without trying to sound too harsh, was that he was perceived as your stereotypical high school ‘nerd,’ if you will,” Zahr said in an e-mail message.

In other words, if this account is correct, he’s barely into his 20s. Someone of his name is also behind this website, Candid Publishing, based in the same area, with the following DNS registration data:

 Walczak, M. webmaster@candidpublishing.com
 PO BOX 10007
 Bedford, NH 03110

Different postbox, but same ZIP as Phoenix One Billing. And the company name happens to be the name by which National One Telecom’s DNS is registered. Candid Publishing’s website has nothing on it, but it looks cool, and promises services including “traffic auditing”. But it does seem to have been around a while: the Walczak of Candid Publishing has been using that company name since at least 2000. Oh, and there’s an interesting exchange here on the Tech Support Guy forums between angry users and a National One Telecom “customer service manager“. It’s more than a year old but entertaining and may shed some light on what this is all about. Could this particular scam have been dreamed up and carried out by small fry?

Rogue Dialers – The Plot Thickens

The premium dialer, rogue dialer, Internet dumping problem (which I just happened, shameless self-promotion follows, to do a piece on which ran on WSJ.com a few weeks back, and on the BBC World Service last Friday) is a weird problem, not least because it would seem to be an easy one to stop. Surely the sleazeballs who are diverting people’s modems to high-paying international telephone numbers should be easy enough to catch, since the money is drawn by the less-than-sinister means of adding it to your phonebill?

It seems to be more complicated than that, at least according to a company that handles the billing  for some of these sleazeball sites. New Hampshire-based Premier Premium Communication has attracted much of the flak over rogue dialers because it is its name that appears on victims’ bills. But while the company remains quite secretive (understandable perhaps; there are a lot of people mad at them out there), it has shed some of that secrecy in a press release issued on Monday in which it seeks to put some distance between itself and its clients:

Premier Premium Communication provides the billing for a number of pay- per-view websites and is not related to “modem hijacking,” or other unscrupulous web practices, company officials said Monday. The company provides only the billing for the UK sites.

PPC’s argument is basically this: Because it handles the billing for a UK company that in turn runs the websites that are causing the problem, it doesn’t directly own or control those websites, ergo it’s not responsible:

Premier Premium Communication is owned by an investor group in New Hampshire that also owns National One Telecom and One Web Direct. The company sends out about 15,000 invoices a week for their client, a UK company that manages a number of pay-per-view websites. Of those, about 4 percent are contested, below the average for the industry. The UK websites, which are neither clients of nor under the control of the N.H. billing company, provide gaming, sports information, entertainment and similar services via the web.

An interesting argument, and PPC must be feeling the pressure to be coming out and saying this. Iit doesn’t, however, go as far as providing an address, contact name, email address or phone number on the press release to allow me to easily follow this up. Which is a shame, because actually their press release merely highlights how complex and messy this whole business is: PPC says that what is upsetting users are the international charges (as separate from the charges for visiting pay-per-visit websites) for which it cannot be responsible: “Consumers who use these websites also incur an international long distance charge from their phone carrier, which is separate from Premier’s billing”.

That said, PPC is offering refunds to those contested charges that prove to be sleazeworthy, and, somewhat charmingly, offers some tips to avoid these scams:

The company is processing each billing dispute to determine which requests are from victims of modem hijacking and will receive a credit or in some cases a refund.

I’m going to look more closely at all this, because I don’t think the phone companies seem to be doing much about it, and I’m guessing that the whole business may be even more complicated than PPC make out. For example, what of the role of the telcos (and even governments) from those remote destinations that victims find themselves calling? PPC, please get in touch if you read this, and I’d be delighted to hear from victims, or, indeed, anyone with light to shed on this scam.


News: Segway Takes A Tumble

 A blow for Segway, the Human Transporter scooter stand-up thingy, which is being recalled after it was found that riders might fall from the device as the batteries are drained of power. The recall, ITWorld reports, affects about 6,000 two-wheeled units sold between March 2002 and September 2003. The Manchester, New Hampshire, company has received three reports of incidents related to this problem, including one person who endured a head injury requiring stitches after falling off , the CPSC said.