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Verizon lawsuit says phony callers are commiting fraud

The technique of getting cell phone information by pretending to be a customer isn't clever, the company contends, it's illegal.

By DAVE GUSSOW
Published January 30, 2006

"Eric" transformed from friendly -- "how you doin' today, buddy?" -- to challenging -- "who's your, uh, supervisor?" -- during the phone call. Mike, a Verizon Wireless customer service rep, wouldn't budge.

No password. No customer information.

The call that began cordially enough in October ended up as evidence in a court case last week when Verizon Wireless sued several companies that run Web sites that sell cell phone records.

"Eric" turned out not to be a Verizon Wireless employee, as he intimated in the transcript filed with the suit. Rather, according to Verizon Wireless, he was someone trolling for personal cell phone information to peddle for profit for a company called First Source.

Some call Eric's technique to obtain information deceptive. Some call it "pretexting," or pretending to be someone else to get information. But, more and more, some call it fraud.

And the sale of cell phone records by online data brokers has caused an outcry from privacy advocates, consumer groups, politicians and the phone companies.

Last week, Verizon Wireless filed its latest suit in federal court in New Jersey. Sprint Nextel went after the same companies. Florida Attorney General Charlie Crist filed a similar suit.

Two Florida legislators have proposed banning deceptive practices to obtain cell phone records as well as the sale of the data records, resulting in jail time and fines. Congress is considering similar bills.

The market for such records has been around for years, said Chris Hoofnagle, senior counsel for the Electronic Privacy Information Center (www.epic.org) an advocacy group. But what began with what he terms "a few rogue investigators" mushroomed as dozens of Web sites began to advertise similar services.

For $110, the Locatecell.com site named in the Verizon Wireless suit will provide a record of all calls made from a given cell phone.

Who's buying? No one has a complete list, but private investigators, suspicious spouses, people involved in lawsuits and collection agencies get mentioned.

Potentially, said Winn Schwartau, a security expert from Seminole, it also could be used for corporate spying and even terrorism. People can obtain information about physical and technical aspects of a target company in a number of ways, Schwartau says.

"What I have not been able to dig up in the past is how does the human element work in this?" Schwartau said. "Who are the people who keep it alive . . . and how do they relate to each other?"

Obtaining cell phone records can help map those details. But it goes further, Schwartau says. Who are lawyers talking to in a sensitive case? Who are companies talking to before a big deal? Who is key in a government agency that might be a target?

"To me this is insanity," Schwartau said. "This opens the door wide."

Global Information Group of Temple Terrace, which was sued by Verizon Wireless in November for attempting to obtain cell phone customer records, denied wrongdoing and characterized its work as something of a public service.

"We pursue people who have breached their obligation to others," Laurie Misner, president of Global, said in a statement then. "And because of our services, criminals have been apprehended, single parents are able to provide for their children and companies are able to recover millions of dollars in assets that would otherwise be lost, and the cost of which would be passed on to consumers."

Few people are buying the argument. Opponents of the practice call it an invasion of privacy and are calling for legislation to block the sale of such records.

Recent publicity on the issue suggests a lot of cell phone records already have been compromised. But Hoofnagle of the privacy center says that's not the case. Consumers can protect their numbers by adding a password, which Schwartau says should be mandatory, not voluntary. If consumers don't set up a password when they open an account, they can call their cell phone company or go online to do so.

Fraud laws already on the books don't handle the problem, according to state Sen. Dave Aronberg, D-West Palm Beach, who filed a bill last week to prohibit access to records, ban their sale and add jail time and fines for violators.

"In many cases, they're not stealing your money," Aronberg said. "They're stealing your privacy."

While a federal law from Congress might be better, Aronberg says the state needs to act in case Washington doesn't come up with a solution. Hoofnagle from the privacy center says banning people from using false pretenses to get information is critical.

"Short of that, we'll be playing whack-a-mole with these investigators, because they can easily close down operations and open up as a new business," Hoofnagle said by e-mail.

- Dave Gussow can be reached at dgussow@sptimes.com or 727 445-4165.

[Last modified January 30, 2006, 05:46:38]