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Phone Cloners Busted!


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FIGHT BACK! BY DAVID HOROWITZ

Phone Cloners Busted

Federal authorities in Northern California recently an- nounced the arrest of a man they
called a kingpin of cellular phone fraud. Clinton L. Watson of San Jose and two associates are
charged with making and selling so-called "clone phones" -- cell phones that are programmed to
charge calls on other people's phone numbers.
The basic techniques of cloning cell phones has been around for several years. The
thieves use what's called an ESN scanner to monitor cell phone transmissions and trap the
phone's identity code. That code is then imprinted on a computer chip, which is installed in
another cell phone, making it an exact duplicate, or "clone," of the original. All calls placed
from that counterfeit phone go on the original owner's monthly bill.
According to the U.S. Attorney's office, Watson devel- oped a very sophisticated computer
program that allowed him to install as many as a dozen different phone numbers in a single
phone. These "lifetime phones" could then be switched from one number to another directly from
the keypad. When one stolen number was deactivated, the user simply switched to another
one, which greatly extended the useful life of the clone phone.
Prosecutors say Watson sold nearly 1,000 phones for $1,000 to $2,000 apiece. He also
allegedly sold his computer program to other cloners for as much as $100,000 a copy.
That gives you some idea of how profitable selling clone phones can be. Industry experts
believe cellular carriers are losing $1 million a day to this kind of fraud. In the Los Angeles ar,
which has more cells phones in use than any- where else in the country, 25 percent of the calls
made through the cellular system are believed to come from counterfeit phones.
Who uses clone phones? Drug dealers and other criminals who don't want their phone
transactions tapped or traced, businesses and individuals who want to cut their calling costs,
and people who operate clandestine "phone rooms," where callers are charged a flat rate to
place long-distance calls anywhere in the world. It's a big money operation.
The cellular phone companies are now developing their own electronic countermeasures.
LA Cellular, a major carrier in Southern California, now offers a Fraud Prevention Feature, which equires dialing a seven-digit access number before a call can be placed from that phone. Only
the user knows the number, and the company says it cannot be picked up by scanner in the
phone's data stream transmission. Right now, FPF is an option, but it could become a standard
feature in the future.
LA Cellular is also experimenting with a system that automatically analyzes individual
cellular transmissions and identifies an electronic "fingerprint" for each phone. If someone triesto use that number from another phone, it won't go through. Many carriers also track their
customers' calls, looking for sudden changes in calling patterns.
Right now, your best protection against being ripped off is to watch your monthly phone bil
closely. If there are any unauthorized calls, report them immediately to your phone company,
and the charges will be deleted. You can also ask your carrier to block overseas calls from your
phone.
If you have any questions or comments, please write to David Horowitz in the Consumer
Forum+ (go FIGHTBACK).

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