Why They Keep Ringing: How Cold Calling Telephone Scams Work

Matthew Hughes 20-09-2016

The humble landline is a very old piece of technology that’s used in a very high-tech scam.


I’m sure you know which one I’m referring to. Someone will phone you up, purporting to be from Microsoft tech support Anatomy of a Scam: The "Windows Tech Support" Con Examined They're constantly on the prowl: cold calling scammers claiming to be from "Windows Tech Support". We were targeted by one of these con artists and here's what happened. Read More . They’ll say that you’re in trouble. Your computer has a virus, but not just any virus — one so serious, they had no choice but to call you.

The person on the other end of the line will then take control of your computer. He will try to build your trust and show you something that proves there’s a virus on your machine. An error in your system log, perhaps.

You’re shocked, so you give him consent to install an antivirus program on your computer. For the privilege of doing so, he will charge you an incredible amount of money. Perhaps even hundreds of dollars.

Of course, there was no virus, and the person on the other end of the line was not from Microsoft tech support. It was a scam — one that has proven to be both effective and lucrative. But have you ever wondered how it works?

The Economics of Phone Fraud

The Windows tech support scam What Should You Do About the Windows Tech Support Scam? If Windows Tech Support calls you, it's a scam. But what should you do? Hang up, lead the callers on, or report them? Read More is almost 10 years old now. It dates back to 2008 and has only increased in popularity.


There’s a reason why this particular scam has endured. Namely, it’s an incredibly profitable tactic that pays dividends for the organized criminals who perpetrate it. Why is that?

Firstly, it costs very little to run. The vast boiler rooms where these calls are made are primarily located in India, although some are based in the Philippines. For someone trying to target consumers in the United States, Canada, the United Kingdom, Australia, and New Zealand, these are ideal places to base your operations.

Call Center Woman Close Up
Call Center Woman Close Up (Plantronics Germany)

Both are relatively poor countries with low labour costs. Due to their colonial history, English is widely spoken in both nations. As a result, a scammer can cheaply and easily recruit workers.


It also means that even with a low success rate, the scam can be profitable. If Microsoft’s “tech support” costs $350 at a time, and the average Indian call center employee takes home $300 per month, you only need to hook just one victim per month in order to make a profit.

And thanks to VoIP technology, the overheads associated with running this type of scam are minimal. These scammers are paying wholesale VoIP rates, meaning it costs them less per minute than you would pay if you were to use Skype. In many cases, it costs them less than a fraction of a cent per minute.

The Persistence of These Scams

You might wonder why nothing is being done to stop this. After all, this is a scam that’s almost 10 years old. As fraud tactics go, it’s ancient.

Here’s the problem. These scams cost relatively little to set up. They are perpetrated over a medium that is hard to trace, namely VoIP. The scammers never give their real names, nor do they provide the real name of the company. They won’t tell you their address, or give you a direct line to call them. If you are trying to trace them down, there is very little to base an investigation off.


Moreover, they are based in countries where the police forces are underfunded and over stretched, and frankly, have bigger fish to fry.

There is another reason why the Windows Tech Support Scam has proven to be so difficult to defeat. Quite often, the ringleaders of the scam are based thousands of miles away from the country where it originates.

In 2014, a 34 year old man from Luton, England was convicted under trading standards legislation for hiring people in India to call people in Britain and falsely tell them their computers were compromised.

Close Up of Phone Number Pad
A day in the life (Frankieleon)


Mohammed Khalid Jamil was sentenced to four months in jail, suspended for 12 years. In addition he was also ordered to pay a £5,000 fine, as well as £5,665 compensation and £13,929 in prosecution costs.

Some might call this unduly lenient, but instead the case was hailed as a “landmark”, and “the first ever successful prosecution of someone involved in the Microsoft scam in the U.K.” If anything, it highlighted the increasingly international nature of this phone scam, and how it can easily cross borders.

The Problem of Automation

In recent years, phone scams have taken on a troubling new dimension, thanks to automation. It’s now possible to make thousands — if not millions — of nuisance phone calls without actually involving a human to dial numbers.

In March this year, the U.K.’s Information Commissioner’s Office (ICO) ordered a Brighton-based company called Prodial Ltd to pay £350,000 for making 40 million nuisance phone calls in four months.

Prodial purchased the phone numbers of British mobiles and landlines from a company in South Africa. It then inundated them with millions of robo-calls regarding the misselling of payment protection insurance (PPI).

Incoming Phone Call From Telemarketer
Telemarketers Leave Me Alone! (Jon Phillips)

The calls were made from a computer based in South-East England. Any leads were then sold to other companies, netting Prodial as much as £100,000 a month.

But here’s the problem. Prodial was a registered as limited liability company. When the fine was issued by the Information Commissioner’s Office, the directors of Prodial simply put the company into liquidation. There was effectively no consequences for inundating ordinary Brits with over 330,000 nuisance calls per day.

And there were no personal consequences for the directors, either. They are now free to set up another business operating under the same modus operandi.

An Unfortunate Reality of Life

Sadly, there is no sign that these scams will ever stop being a thing. They are just too profitable, and too cheap to run. If you ever get called by one, just hang up Don't Taunt Fake Microsoft Tech Support Scammers, Just Hang Up! Performing a public service by taunting Microsoft tech support scammers? Things can turn nasty. Here's why you should hang up. Read More and don’t give it another second’s thought. If you or someone you know has fallen for it, we’ve previously written about what you should do in the aftermath What Should You Do After Falling For A Fake IT Support Scam? Search for "fake tech support scam" and you will understand how common it is across the world. Some simple precautions after the event could help you feel less of a victim. Read More . There are also strategies that can be employed to defeat robocalls and nuisance telemarketers How to Stop Annoying Telemarketers & Robocalls From Calling You Are you tired of being called by prerecorded messages and robots? Here's why that happens and what you can do to stop them. Read More .

Are you being inundated with nuisance phone calls? Have you found a strategy to deal with them? Tell me about it in the comments below.

Image Credits: Yiorgos GR/Shutterstock

Related topics: Microsoft, Scams, Tech Support.

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  1. larry miller
    August 6, 2018 at 9:01 pm

    My self in Canada, we have a do not call list, which I am on. BLAH BLAH BLAH (means nothing) so, I must do it my way.
    I looked into purchasing a hi pitched rape not good enough, more thinking.
    Ah ha, Went into sporting goods store, air horn, fog horn, for ships over 60 feet long, also used in sporting events to signal a start. Well blows at approx 130db, at 140db your eardrums blow out, NOT REPAIRABLE.
    I called the do not call center, local police and RCMP fraud squad, ALL SAID GO FOR IT. If someone calls that I do not recognize the Ph# I ask them to wait 2-3 seconds till I turn tv or music down (meanwhile retrieving air horn). If the other end says anything related to scam, It's blow time, approx 3 seconds....I promise there will be no human on the the other end. And probably going home or in search of medical every time