The crackdown on deadbeats in the carrier business produced even more dramatic results. A large number of smaller carriers and debit card companies had made it standard operating procedure to stiff the end providers of international telephone time. Their method was simple. They’d open an account with a large phone company and be given a small credit line. They quickly ran a lot of international calls, exhausting the line, and would promptly pay their bill and ask that the line be increased. The carriers, anxious to show Wall Street the increased revenue that selling expensive international time produces, would readily agree. The small company would now pay the bill again. This time, though, the payment would be slower and many of the individual charges would be protested. The customer by now, however, would be really important to the big carrier’s total revenue projection, and so their continual request to have their credit lines increased would be granted again and again. Payments would continually come in slower and slower, and disputed items would increase. Eventually, the big carriers would find themselves millions or tens of millions behind. The little guys would then stiff them entirely and move their business to other carriers or force the big guys to compromise the bill by millions.

My decision to cut all credit off from these crooks and make them pay in advance would, six months earlier, have involved substantial cost. The little carriers would just have taken their business to another revenue-hungry sucker and Wall Street, noting a 50 percent decline in our carrier business, would have hammered the stock. Wall Street, however, no longer mattered to us.

Fortunately, however, Wall Street mattered to our competitors. Our competitors were forced to report the hundreds of millions in losses they’d had to take as a result of the little guys’ scam.

When Wall Street saw this, they went nuts. Our competitors’ stocks were hit worse than if they’d never shown the revenue in the first place. Many were forced to leave the business. All the others tightened their credit policy, selling only to reliable accounts.

Only we had developed a system to deal with bad debt, able to cut off a risky client the second his last dollar of deposit was used up. The would-be crooks had no choice but to pay up front. We had become their supplier of choice. We were after all still the least expensive supplier in the industry.

Many of these guys sold phone cards to immigrants for cash. Their business was so hand to mouth that they literally had to make deposits into our account daily, even on Sundays when the banks were closed. This meant having to meet messengers in parking lots who would deliver paper bags (sometimes greasy paper bags) with $50,000 or $80,000 in cash to hold their accounts open till Monday.

Our guys were nervous about going to make the pickups. “Why?” I asked. “They’re bringing us the money. If you don’t make it back, we’ll just switch off their lines.”