Like most technology, VoIP can be used for evil. VoIP users aren't more likely to be scammed than any other consumer but there are specific scams that seem to plague the VoIP community.
Different Types of VoIP Scams
- SPIT (Spam over Internet Telephony)
- Vishing (VoIP phishing)
- Account Fraud
- Pyramid MLMs
SPIT (Spam over Internet Telephony)
VoIP spam involves unsolicited telephony communications to or with a user. SPIT can work the same way traditional telephony spam works; telemarketers can target VoIP lines, as can autodialers.
Email spam is extremely prevalent, but filtering technology can detect key words and phrases to cut down on what makes it to a user's email inbox. Voice traffic is more difficult for VoIP providers and Internet Service Providers to filter - they'd have to eavesdrop. But VoIP's many built-in privacy-enhancing features, like anonymous call blocking, international call blocking, and Caller ID can help protect you from SPIT.
Vishing or Phishing over VoIP Scams
Phishing is part technology crime and part manipulation, since the trick of phishing is getting people to give away their personal/bank account information. Email addresses, links, and content all imitate official messages from banks or various financial services like PayPal.
Similar scams can occur by telephone. The scammer uses personal information to convince the person being scammed to wire cash to the scammer. Scams like this especially target the elderly.
VoIP scams work just like phone scams: the perpetrator gets enough information or convinces you they are a legitimate, trustworthy authority. The difficulty with VoIP scams is that VoIP makes it easier for the scammer to appear legitimate.
One VoIP scam from a while back used both emails and calls to convince the person being scammed that their credit card information/bank information was stolen: via email, victims were given a number to call - or the victims were cold-called and given false phone numbers. Either way, in both circumstances, the scammers used their deception to gain financial information from their victims. The scammers were even able to imitate a bank's phone tree with their own VoIP PBX.
Another more recent VoIP scam specifically targets Skype numbers with an automated "notifications" that warns users to update a Windows system file, with the threat that "failure to do so may result in severe computer malfunction." The "system file" is either a link to a malware download or a website that can steal credit card information.
However scammers do it, they're looking for one thing: your personal information. Data thieves can use any means of communications to try to take advantage of people - VoIP is no exception.
Be wary of anyone who calls and asks for your credit card info. Only use the phone number on the back of your credit card, bank statement or account statement, not from emails or phone calls.
Toll Fraud/Compromised Account Charges
As you can see, data thieves don't necessarily need to 'hack' a system to access your account information. Phishing makes gaining access to your account much easier.
With some VoIP providers, such as Skype, accounts that have calling credit and attached credit cards in plain sight can be compromised. Once a hacker gains access to your account, they can makes numerous expensive calls to international destinations.
To protect your account, never enter your username or password anywhere but on the official VoIP website or the official VoIP program you got from its website. For Skype, never click a link in text during a call from a stranger.
VoIP Resale/MLM Pyramid Scheme
In a VoIP multi-level marketing pyramid scheme, you pay a fee to join the VoIP provider's network of resellers. The way that the affiliate payment structure works, you never actually provide anyone with the phone service because it doesn't pay. Instead, you recruit "sales representatives," who pay you a fee to sell VoIP (but really, they recruit their own sales representatives). Meanwhile, the scammers reap the benefits from all the entry fees. If you're at the top of the scheme, you may see a little kickback; more likely than not, you won't see anything.
Just like any pyramid scheme, this kind of VoIP scam is too good to be true.
It's silly to expect a profit of millions when you don't know the technology you are reselling—or if you aren't even selling a technology. If a company hires you and doesn't tell you what exactly you're selling, something is wrong.
Many VoIP providers are legitimate VoIP resellers. And there are legitimate multi-level marketing companies. But the legitimate companies don't charge recruits for the privilege of working for them. Legitimate affiliate marketing companies pay their salespeople when they bring in new accounts.
Be wary of any company that promises big returns for "only a small fee" and a "once in a lifetime opportunity."
The biggest example of a dubious MLM scheme comes from ACN. ACN, Inc, a multilevel marketing company, was sued three times between 2002 and 2010 for VoIP reselling pyramid schemes, but all allegations were found to be unsubstantiated.
ACN does offer phone services. They've been around since 1992 offering traditional long distance phone service and other communications. Sales representatives earn money for recruiting at least 6 customers and 3 other representatives with 6 of their own customers who pay the $500 entry fee for a "starter kit." Scam.com forum post from former ACN representative.
Can VoIP providers scam you?
Short answer: No. If the VoIP company provides you with VoIP service, they're not scamming you.
Long answer: It all depends on how you define 'scam.' Is hiding something from you in the fine print a scam? (VoIP providers tend to say "No," until caught.) Direct VoIP scams do happen, occasionally. Usually, though, scam is a word that angry people use when they're talking about a company that they think has dealt with them unfairly.
Is magicJack a VoIP scam?
We deal with a lot of unhappy magicJack customers at Voipreview.org. However, magicJack does provide phone service for very little money. magicJack is not a scam.
That's not to say magicJack doesn't have problems: magicJack does advertise certain features that do not function for everyone. Quality varies between customers. It may also be difficult to get the 30 days free service that magicJack promises, since magicJack will charge $50 if you do not return the magicJack device is within a 30-day time period. Customer service is very spotty. You get what you pay for, basically.
Read our review of magicJack or read user reviews of magicJack.
Is Vonage a VoIP scam?
We also get lots of reviews from upset Vonage users. Vonage is not a scam; they supply real phone service. Like magicJack, though, Vonage has problems with customer service, especially when trying to cancel an account. Vonage has improved their cancellation policy in recent years.
Before purchasing any VoIP service, read the terms and conditions. Sure, it's a hassle, but reading the fine print may save you a headache down the road.
For example, Vonage has a $39.99 early termination fee upon cancellation. That should be mentioned in their terms before you sign up.
Read more about Vonage or read reviews of Vonage.
VoIP Scams Targeting Vonage Customers
There have been email phishing scams directed at Vonage customers in the past. If scammers don't have any info about what services you've purchased, it's a shot in the dark. They're just trying to get your credit card and account information. You can be targeted for a Vonage scam just like Mac users can receive malware scams for Windows and you can receive fake emails for banks and services that you have no account with!
Avoiding VoIP Scams
The best advice when it comes to avoiding VoIP scams (and scams in general) is to be skeptical:
Check email headers.
Don't click on links in emails, or if you want to risk it, make sure you check the address by scrolling over it (most browsers show a link's URL at the bottom of the window).
Also, read the content carefully. Does it make sense? How many spelling and grammatical errors are present? Many scammers have a poor grasp of the English language.
If you're contacted by phone, ask for more details about the company calling you or who you're dealing with. Do not give out information over the phone. Hang up and go to the company's official website/support line.