Pizza fraudsters take a slice of your credit

CWCITIZENSHIP_043_KW_.jpg (L to R) Ana Perez, with CARECEN, Eva Chong, a volunteer with the Chinese Newcomers Service Center, Denise Gums, with marketing outreach for the African Immigrant & Refugee Resource Center stand beside Congresswoman Nancy Pelosi while she gives a press conference during the "Citizen Workshop" arranged by the congresswoman held at the Bill Graham Civic Auditorium on Monday August 14, 2006. Eligible legal resident who is seek US Citizenship received free assistance with their citizenship applications and private time with volunteer lawyers. Kat Wade/The Chronicle ** Ana Perez, Eva Chong,Denise Gums, and Congresswoman Nancy Pelosi (Subject) cq Mandatory Credit for San Francisco Chronicle and photographer, Kat Wade, Mags out less CWCITIZENSHIP_043_KW_.jpg (L to R) Ana Perez, with CARECEN, Eva Chong, a volunteer with the Chinese Newcomers Service Center, Denise Gums, with marketing outreach for the African Immigrant & Refugee Resource ... more Photo: Kat Wade Photo: Kat Wade Image 1 of / 1 Caption Close Pizza fraudsters take a slice of your credit 1 / 1 Back to Gallery

If you're thinking about ordering a pizza for dinner tonight, you'll definitely want to think twice if the pizza place insists that you pay by credit card.

That's because an AT&T official fired off an internal memo the other day warning of a scam being perpetrated on California consumers, pizza restaurants and the telecom giant itself. (A copy of the memo has made its way to my hands.)

Here's how the scam works:

A fraudster contacts an AT&T service rep and says he works at a pizza parlor and that the phone is having trouble. Until things get fixed, he requests that all incoming calls be forwarded to another number, which he provides.

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Pizza orders are thus routed by AT&T to the fraudster's line. When a call comes in, the fraudster pretends to take the customer's order but says payment must be made in advance by credit card.

The unsuspecting customer gives his or her card number and expiration date, and before you can say "extra cheese," the fraudster is ready to go on an Internet shopping spree using someone else's money.

John Britton, an AT&T spokesman, confirmed the contents of the memo and said two separate instances of the call-forwarding scam have been reported so far in Southern California.

Could the scam be more widespread? Britton said it's possible there have been other instances elsewhere in the state. He said AT&T has no way of knowing until an individual pizza parlor calls in to ask why its phone has stopped ringing.

"If someone doesn't call us, we wouldn't know about it," Britton said. "After learning of this, we immediately took action to warn employees to be extra cautious when dealing with any requests for call forwarding."

He said the two known instances of the scam being successfully pulled off occurred in two Southern California area codes. He declined to provide further details.

Once AT&T was alerted to the scam, Britton said, company officials focused on trying to catch the perpetrators. He said at least one of them has attempted to run the scam a few more times.

"When he calls, we ask for further information," Britton said. "The person then hangs up."

He was reluctant to discuss the steps AT&T has taken to improve its call-forwarding system so this sort of thing doesn't happen again. What, for example, is to prevent someone from convincing AT&T to forward all calls to a local flower store or some other business that takes orders by phone?

"We had some guidelines in place that we believe were effective," Britton said. "Now we have extra precautions."

He added that AT&T has alerted other phone companies about the bogus call-forwarding requests. "Hopefully, if these scammers try to call them up, they'll be aware of this and the scam will be thwarted," he said.

Britton said it never ceases to amaze him how ingenious con artists can be.

"If these people put that ingenuity to work in the legal world," he said, "they'd probably make a lot of money."

More red ink: Speaking of lots of money, the Congressional Budget Office said last week that the federal budget deficit will increase next year to $286 billion and will total almost $1.8 trillion over the next decade.

Republicans, who control the nation's purse strings, hailed the numbers as good news. Rather, they ignored the prospect of higher deficits down the road and focused instead on word that this year's shortfall will be "just" $260 billion, a $59 billion improvement over last year's $319 billion budget hole.

"The federal budget deficit is being erased as a result of the pro-growth economic policies implemented by a Republican Congress, along with renewed focus on spending taxpayer dollars wisely," said House Majority Leader John Boehner.

House Democratic Leader Nancy Pelosi countered that the deficit numbers "are just the latest evidence of the Republican failure to control spending and burden our future generations with mountains of debt."

Political posturing aside, the thing that struck me is that when you approach the budget numbers realistically, they're even scarier than you think.

The Concord Coalition, a nonpartisan budget watchdog group in Washington, noted that the Congressional Budget Office's projections assume that politicians will hold spending increases for discretionary programs -- including defense -- to just 2.7 percent annually.

From 1994 to 2004, spending on discretionary programs grew by an average 5.2 percent a year, the coalition pointed out.

It also observed that the budget office isn't factoring in President Bush's tax cuts becoming permanent and isn't anticipating any efforts to protect millions of middle-class taxpayers from the alternative minimum tax -- a move that would cost the government more than $1 trillion over the net decade.

(The alternative minimum tax was intended for rich people taking deductions for tax shelters. It isn't adjusted each year for inflation, which means middle-class taxpayers increasingly find themselves owing money under the levy.)

Factoring in these and other financial obligations, including the wars in Iraq and Afghanistan, the Concord Coalition determined that the deficit will skyrocket over the next 10 years not by $1.8 trillion but by almost $5.2 trillion.

"The most important point to take from this report is that current fiscal policy remains unsustainable under realistic assumptions," said Robert Bixby, executive director of the group.

But since when has realism been part of the budgetary process?

Programming note: I'll be gone fishin' this week (although alert KGO radio listeners may come across me on Thursday and Friday afternoon -- and this very evening, come to think). Back in these pages on Aug. 30.