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AT&T has denied wrongdoing in this modem hijacking scam, which fraudulently bills customers for calls to far-away island countries such as Vanatu, Niue and Madagascar. But several people who have fallen victim have joined a lawsuit against AT&T, claiming the company is a "willing participant" in the scheme.
AT&T is now removing the disputed charges from those customers who complain.
O.K. here's the scam...
1) The consumer - logs on to a computer and accesses a pornography site through his or her Internet Service Provider (ISP).
2) A teaser Web site then downloads "dialer" software onto the consumer's computer.
3) After "dialer" software is activated, the consumer's computer modem disconnects from the ISP and dials an international telephone number assigned to Madagascar, Vanatu or another distant foreign country.
4) The consumer then returns to the Internet through an ISP purportedly located in some foreign country initially called.
5) The consumer's Web site is directed to an adult-content Web site hosted on a computer in the United States.
6) You are billed at up to $7 to $8 dollars a minute and the charges appear on your AT&T bill. Keep in mind that you don't have to be an AT&T customer to be a victim.
Here's What to Do...
1) Don't pay your telephone bill even if your long distance company threatens to cut off service. The odds are you will never see the money again.
2) Put the charges in dispute with your long distance company and let them know you are filing a complaint with your local public utilities commission if they attempt to cut off your service. Also, consider switching to one of these free or low-cost long distance services.
tel3 is a highly rated quality service. But there are many to choose from. 
3) File a complaint with the FCC (Federal Communications Commission) about the company and the charges.
4) Review your telephone bill carefully each month.
Source: clarkhoward.com
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