Telecom call centre staff have set up additional mobile phone numbers for existing customers - only to find the "customers" were overseas scammers.
The company said it knew of nine customers who have had fraudsters' mobile phones connected to their accounts without their knowledge.
Telecom suspected the numbers were set up to charge large bills to customers' accounts.
But it would not reveal what use - and what charges - had occurred in the scam.
The company is working with the Communications Fraud Control Association, an organisation based in the United States, to determine the fraud's origins and why New Zealand numbers were targeted.
The scammers posed as Telecom employees and contacted people on their mobile phones, asking whether they were on a pre-paid plan or post-paid plan.
People who identified themselves as post-paid plan users were told they had won a $50 credit and were asked for personal details such as their full name, address and birthdate.
Those details were then used to dupe Telecom's call centre staff into transferring a new number to a handset held by the scammer, who nominated a handset number.
A Telecom spokeswoman said call centre staff had been told of the scam and a warning notice posted on the company's website.
"We urge customers to be wary of any incoming mobile phone calls from unexpected international numbers."
Telecom staff who call customers would never ask for personal details or what type of plan a customer was on, she said.
Vodafone was not aware of any of its customers being targeted.
Telecommunications Users Association chief executive Paul Brislen said that although Telecom would pay any of the victims' bills, ultimately that cost was passed on to consumers.
Such frauds succeeded because companies such as Telecom and Vodafone frequently contacted customers offering promotions or deals such as free calling minutes, hesaid.
"The reasons these things work is they are so similar to the business models that the telcos and the banks employ anyway.
"So it's not too out of the ordinary to expect your phone company to call you. What you should do ... is ask for verification."
Companies such as Telecom were caught between offering an accessible service and protecting customers from scams, Mr Brislen said.
"Customers like being able to do things online. The days of spending your lunchtime queuing up at the post office to do everything, they're well behind us."
A spokesman for the Ministry of Consumer Affairs' Scamwatch said people should treat their personal details as they would money.
"Give out your personal details and information only if you have initiated the contact and trust the other person you're dealing with."
People should check their privacy settings on social networking sites such as Facebook to ensure information such as their full date of birth was not available, he said.
Scamwatch had recorded a marked increase in the number of phone calls being made from fraudsters to New Zealanders.
"Whereas scam emails can be easily deleted, phone scammers can be intimidating and aggressive. Be calm and remember you have the power to hang up."
HOW IT WORKS
* Scammers call mobiles and pretend to be from Telecom.
* They promise $50 credit and take personal details.
* The details are used to dupe Telecom staff into setting up additional numbers.
* New numbers are transferred to handsets held by scammers.
* The phones can then be used to charge large bills to victims' accounts.
Overseas scammers dupe Telecom staff
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