Thieves add R1m to account

If you’ve got a contract cellphone, safeguard it, because if a fraudster gets hold of it, your bill could skyrocket within days and potentially cripple you financially.

Many contract cellphone subscribers have learnt the hard way that their network’s bill limit facility is not entirely reliable, and have had to pay an unexpectedly high bill.

Because, of course, the contract’s small print states the network will not be responsible if the bill exceeds the customer’s chosen monthly limit.

Ashok Sewpersad of Durban, however, had great faith in this facility, because twice when he exceeded the bill limit on his “spare” contract cellphone, MTN suspended his outgoing calls. So last year he applied, in writing, to increase his monthly limit on that cellphone to R2 300.

On Thursday, January 27, he flew to Joburg, returning home two days later.

He had packed the spare MTN contract cellphone in his check-in luggage as a back-up, and hadn’t realised it had gone missing until he got a call from an MTN credit controller on the morning of Monday, January 31.

She queried “a lot” of international activity on his account, which had by that stage, she said, generated a bill of R19 000.

Sewpersad told her he hadn’t used the cellphone and says the woman undertook to report the matter to the network’s fraud department.

Meanwhile, he reported the theft to the police.

Next evening MTN told him the bill stood at a mind-blowing R973 000. The explanation for the big jump was just that there’d been a billing delay.

The calls were made in less than 36 hours and the bill ran to an incredible 77 pages.

Naturally, Sewpersad was dumbfounded, especially given that he’d thought he had a bill limit of R2 300, and his average bill on that contract in the preceding six months was just R89.

“How was this protective measure overridden by the fraudsters?” he wondered.

He accepts that he should have done more to safeguard his phone, and that he did not report its theft to MTN because he didn’t know it was stolen.

But for almost two months he got no answer from the network on the bill limit issue, or how the debt jumped to almost R1 million in under 48 hours.

By the time he turned to Consumer Watch for help last month, MTN was talking about payment plans, and had more than once cut off the service on not only the spare cellphone, but to his main MTN cellphone and internet account as well.

He was terrified of getting a bad credit record as a result, and saw his future plans destroyed by the massive debt.

Within a week, service on all three contracts resumed, and MTN announced its intention to write off the debt.

MTN’s customer service executive, Eddie Moyce, said Sewpersad was the victim of “call forwarding” or divert fraud.

The fraudster diverts the stolen SIM to a premium-rated international number, which in turn diverts to another number and so on.

The fraudster dials the stolen number repeatedly and simultaneously connects multiple calls, which is how the massive bill was run up in so little time.

So how does the fraudster score?

An intermediary pays him an attractive commission on all those calls generated.

As for the bill limit issue, Moyce said there was no such limit on the account and it was MTN’s systems which alerted the network to the problem.

Sewpersad now has a very clear understanding of how vulnerable contract cellphone subscribers are if their phones land up in the wrong hands.

“Customers really need to be vigilant and look after their SIM cards,” MTN’s Eddie Moyce said, and the two cases on this page certainly illustrate what can happen if you lose track of your contract cellphone for a day or two.

Never pack a cellphone into check-in luggage when travelling by air, and if you have “spare” contract cellphones for occasional use, keep them locked up.

In short, don’t lose track of where your phone is – whether it’s lost or stolen, it’s crucial that your report this to your network or service provider as soon as possible, given how fast a fraudster can run up a bill. Even if you do have a bill limit facility on your contract – Vodacom and Cell C still offer them – if you read the small print you’ll see that the network will not hold itself responsible for any failure of this limit.

I asked Vodacom and Cell C whether they found that setting a bill limit is an effective tool in stopping cellphone thieves from running up huge bills.

Nomsa Thusi, Vodacom’s executive head of corporate communications: “We do offer the call limit service and we currently have no plans to discontinue it. Our view is that even though this service is not a robust method of preventing fraudulent practices, to a large extent it does help to limit fraud… Customers should always report their lost cellphones as soon as they become aware regardless of whether they have a call limit in place. This will enable us to block the cellphone immediately.”

Karin Fourie, Cell C’s public and media relations manager, said: “We do still offer this service. We manage this type of account as a prepaid account with a threshold set at the beginning of every cycle to manage the subscriber’s usage. Once the credit limit is reached, the outgoing calls will be temporarily blocked. Credit limits do prevent high usage and fraud, but customers have to request this service.”

*Well, as it happens, MTN no longer offers a bill limit to its subscribers.

It was discontinued at the end of March.

Asked why, and whether the move had anything to do with the implementation of the Consumer Protection Act, MTN’s Eddie Moyce said the timing was a coincidence.

“We discontinued it because MTN could not guarantee that the service worked effectively at all times,” he said.

“This was stipulated in the terms and conditions regarding the service. We are advising customers that require a bill limit service to adopt and or migrate to top-up packages as they provide customers with control over their expenditure.”

The timing of this move couldn’t have been worse for Peter Eggeling, a South African who works in Qatar in the Middle East and has three MTN cellphone contracts, two of them for his daughters who are students in Joburg.

When the daughters’ contracts were renewed last August, Eggeling insisted on monthly bill “caps” of R350 being placed on one contract, and R250 on the other and duly signed the required paperwork.

On April 13 Eggeling’s daughter Tamara, who had last used the cellphone three days earlier, discovered that her cellphone was missing and when she reported this to MTN, she was told that a bill of about R55 000 had been run up (R48 000 plus VAT).

Eggeling says she was told that this was done primarily by means of SMS entries to competitions. (Given that the cost of SMS competition entries has been limited to R1.50 since April 1, thanks to the Consumer Protection Act, that’s some prolific competition entering!)

The cellphone was blacklisted and the matter has been reported to the police.

Naturally, Eggeling asked MTN why the bill limit on the contract SIM had not prevented the fraud from escalating to that point, and that’s when he was told that MTN had discontinued the bill capping service at the end of March.

That’s when he checked his e-mailed statement, and discovered the notification at the end of nine pages of billing.

“There was no obvious alert about the vital service,” he said. “The e-mail looked like just the typical bill on the face of it.”

I took up this case with MTN last week.

Moyce said in accordance with the contract, notification about the imminent dropping of the bill limit facility was included with Eggeling’s statement in November 2010 and again in March 2011, and an SMS was also sent to affected customers in March.

Eggeling concedes that his daughter did get this SMS but didn’t think to tell him about it, and his own MTN cellphone was switched off in his Joburg home while he was in Qatar.

Given the billing pattern, he said, MTN suspects that the cellphone was stolen on April 10. “We attempted to contact the customer after suspecting that the bill was escalating at a fast rate.

“Subsequent to our attempts we successfully barred all services on April 12.

“The customer reported the stolen SIM on April 13.”

But the network chose to credit the R55 000 fraudulent amount in full, “as a goodwill gesture”, news of which came as a huge relief to Eggeling.- Pretoria News