I've just heard about a nasty new problem that can actually cost users hundreds of pounds/dollars/anything else. It uses a system I already knew about to reconnect you to a premium rate number which then means you're paying about £1 a minute while connected.

The difference here that worried me was it's supposed to do it without you noticing. Previous versions cut you off and then redial obviously, and you just have to cut them off and delete them from your system, but I was told this does it behind the scenes very quickly. I can't believe it can take less than the usual time to reconnect, which is at least 30 seconds here, as how can your modem indicator go out and return without the noticeable wait, plus I can always hear my modem's dial tones, which I didn't think could be silenced.

Has my reliable source been mistaken, or can this nasty really do magic tricks like this? A resident of Willesden, a couple of miles from me, has already been caught for about £300, so I know they're currently targeting my area, so I need to know if I have to shell out even more money for premium rate call barring or will my firewall take care of it? All information gratefully received as usual, and I'm dreading the next phone bill till it is!

Rogue dialers can take over the connection fairly seamlessly.

Regarding the firewall: This may not protect you. A dialer can be installed by use of ActiveX. I'm fairly sure that, once on the computer, they install themselves as BHO's (browser helper objects). This being the case, the firewall will see their activities an normal browser behavior and therefore won't stop a dialer from phoning home.

In any event, spyware removers should pick up on any dialers that happen to get onto the computer. Run both SpyBot and Adaware (always update them before running). Spybot can immunise your computer against many nasties, including rogue dialers. links in this thread

Also, as already said, consider changing your browser or at least set IE to reject ActiveX code (as has been recommended here and elsewhere). Visit Windows Update. I understand there's another patch to help guard against an ActiveX vulnerability. I can't test this out because I'm using XP with SP2 RC installed. This isn't vulnerable apparently so nothing comes up at Windows Update for me ...and I don't use IE of course.

Edit: If worried, you could also look into any dial-up connections you have to see if there's any you don't recognise.

We have received warnings about this from our Telecoms company, they say that going broadband would obviously stop the problem but for those who don't want to go that route they would suggest subscribing to the service which would prevent any premium calls being made from the line - yes it costs a little money but could save lots especially if you are not the only person using the computer. YOU might never click on a pop-up or whatever let the nasty into your computer but if you have children using it they might not be as careful.

We have been contacted by a number of people who have been caught.

Thanks TW, I have got spybot and ad aware (probably from your earlier advice) so fingers crossed they'll do the job between them, though I thought they operated to wipe things up after the event rather than catch them in advance, but I'm pretty new to both, so could well be wrong.
The saddest thing is that if these are carried out by companies abroad (which they are) our authorities won't touch them. This is what our correspondent from Willesden was told, so unlike credit card frauds, which have happened to me twice probably via internet purchases (before the firewall etc), the companies owed the money illicitly, enforce the payments 100% even though there is actually better evidence of fraud via telephone records than credit card, and as a result jointly profit from a crime with the full acceptance of the British authorities. Until companies can find a single way of catching these without the need for call barring or broadband, which isn't yet available here, everyone caught will lose as much money as these people can get before spotted (usually via a phone bill), which is an unlimited amount. As someone who spent 3 years studying law to see the principles I learnt being ignored due to inconvenience, I wonder whether it will encourage more and more dubious people to exploit these loopholes knowing they can't be caught. Just like a free cashpoint machine, I am amazed, or maybe not...

I glanced at an article on Sunday about this problem and how it isn't all gloom and doom in the sense that EVERYONE who gets caught has to pay, unfortunately as I have changed to broadband I didn't do more than glance through it and I am not sure if it was the Observer or the Mail on Sunday.

I've been fortunate enough not to have had this problem myself, but earlier in the year my dad was facing a £350 phone bill due to a dialler scam. His modem had been disconnecting and reconnecting without his knowledge to a number costing £1.50/minute. He knew nothing about it until BT phoned to tell him his bill had gone over £300 and they had put a block on premium numbers. They also advised him to get in touch with ICSTIS (the telephone watchdog), who told him they'd already had other complaints and that the Spanish company who were responsible had been ordered to reimburse everybody they had scammed.
We weren't really expecting that he would get his money back, so we were amazed when a cheque arrived from Spain for the full amount!
So if anyone else gets caught out by one of these scams, don't just pay the bill without making an effort to get your money back first.

It does your heart good to read of a happy ending like that. It's good encouragement for others to have a go too. Well done!

The article I referred to was advising people to contact them, good to know that it actually works.

My Mum got into a panic over it from something she read in the paper last week, but hadn't kept it. I only heard the worst case scenario she came across, but I really hope not only more authorities do decide to enforce refunds, but some of the supposed geniuses in security write a programme that blocks the diallers before they reach any individual computers.
Up till now, all fiddles were with a bit of advance warning, and even credit card thefts are often picked up by banks as soon as something odd is withdrawn, which happened to me the second time it happened. This is the first where unless we take out a form of insurance in advance (call barring/complex security) everyone's equally susceptible to winning the lottery draw in reverse. It's similar to text message scamming, where it's now also possible to send a text message that costs the receiver to get it. I think this'll be squashed fairly quickly as it's easy to track, but the days of being charged to receive a dodgy phone call are close, as I predicted here some time ago. Now if I wanted an early retirement to Mexico...