Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Fraud Shuts Off Internet Provider

The U.S.-based Internet online service CompuServe has shut down its local access numbers in Russia and Bulgaria in response to widespread credit card fraud, company officials said Tuesday.

As of Monday, CompuServe's 500 customers in Russia have been forced to connect to the service via a local Internet service provider, such as Glasnet or Russia Online, instead of through direct access lines.

CompuServe, which operates in 185 countries, sent users in Russia and Bulgaria a message Feb. 20 explaining the suspension of direct network access.

"The network access locations have become the targets of systematic fraud, driving up our telecommunications and connections costs to an intolerable level," the message said. "Until we are successful at putting an end to this fraud, we have no option but to suspend service from these particular local access numbers."

Compuserve has never had to cut direct access lines in an entire market before, due to fraud or any other reason, said Tatyana Gau, vice president of integrity assurance at America Online, which acquired CompuServe last fall.

Conmen in Russia and Bulgaria have been using fake credit card numbers, or numbers and passwords belonging to other consumers, to sign on to CompuServe, Gau said.

Similar instances of fraud prompted America Online to shut down its direct access numbers in Russia in early 1997.

Those wishing to cheat the system can buy black-market software that invents a series of digits resembling a credit card number, which can be used to sign on to CompuServe.

Signing on via CompuServe's direct access numbers, the user racks up charges similar to a collect phone call, Gau explained. CompuServe pays third party companies such as SprintNet to provide customers with a communication link, and then bills those charges back to users.

"When we find no paying customers on the other end, the communications costs become intolerable," Gau said.

To access CompuServe via the Internet, users need to open an account with a local Internet provider. Once the user has a web link, he can use CompuServe software to connect to the service.

Those who spend a substantial amount of time online may pay less for Internet connection than they would for connection via direct access numbers, said Richard D'Amato, a spokesman for AOL.

Accessing CompuServe via the Internet could result in slowed connections, said Robert Farish, research director at computer consultancy IDC Russia.