What's it called? A blue box? How does it work?"

"I don't know how it works, but believe me, it works. You can borrow it, but for God's sake don't tell anybody."

"And I can make long-distance calls without paying for them?"

"Yeah, it fools the phone circuits so you get the calls for free."

"This is great."

"Yeah, well, the phone company doesn't think so, so keep your mouth shut."

My friend (nameless for obvious reasons) justified cheating the phone company by using the creakiest excuse in the world: "I know it's wrong to steal, but see, I have this gray-haired widowed mother down in Miami, and my phone bills are starting to match my mortgage payments . . ."

This was back in the mid-'70s, when lots of so-called blue, black and red boxes were floating around, nefarious gizmos that used a variety of electronic scams to fool Ma Bell into thinking she'd gotten her money. One type of box actually simulated the sound of coins being inserted into a pay phone realistically enough to fool the operator into putting calls through.

Swindling the phone company wasn't new to my friend, of course. As a kid, he said, his buddies had used a trick -- a bit of folk wisdom passed from urchin to urchin -- that literally shocked pay phones into giving up freebies. When they stuck a straightened paper clip into a certain hole and scratched the other end of the paper clip against the metal coin chute, it shorted something in the system, producing a dial tone. (This no longer works, nor do the various boxes, so don't even think about trying these schemes. And even if they did work . . . Well, keep reading.) Sure it was stealing, but like most people, my friend argued that the huge, rapacious, monopolistic phone company could afford it more than he could. Besides, it was so easy.

You can't fool Mother Bell anymore because she's gone to the Big Phone Booth in the Sky, having been thoroughly drawn and diced by divestiture under the federal court decision that shattered the monopoly. But lots of other phone companies, long-distance services and our own beloved C&P are still with us. And when it comes to phone fraud -- making calls without paying for them -- the companies are mad as hell and going after the bad guys.

A big part of the phone companies' problem is that when we steal calls, we don't think of ourselves as bad guys, certainly not as criminals. Phoning your Uncle Benny and charging the call to a telephone credit card number a friend has given or sold you doesn't exactly put you in the same league as an Ivan Boesky or Jesse James, right? Because cheating the phone company is the mildest of white-collar crimes. Socially acceptable. Just a lark.

Wrong. Last year, U.S. phone companies lost $14 million to toll frauds alone. (Add in all the unpaid bills and the total comes to $500 million.) The phone companies obviously don't want to absorb such losses, so they raise their rates to compensate, and we all get stuck with the bill in the end. And the problem -- which isn't getting any better -- involves a wide social cross section, from teen-genius hackers to white-collar professionals and unemployed executives still charging calls to telephone credit cards they're no longer entitled to use.

Some callers don't realize they're committing a crime. A phone call is vaporous: You can't see it or touch it, so it doesn't really exist. Nor does stealing a call involve the heart-pounding fear of instantly getting collared and tossed into a squad car. Yet the insubstantial "it" you're stealing is a service, and theft of service, which is what the phone companies and the courts call it, is indeed a crime.

One of the most common methods of stealing calls, for example, is to use someone else's telephone credit card number. This is fairly easy for the phone company to stop, once it discovers the theft, by invalidating the card.

Catching the thief is harder because the calls must be traced to an individual by a phone company security investigator. But once caught, the filcher can be convicted of credit card theft, which in Maryland, for example, can mean a $300 fine and up to three years in the slammer.

Two other methods of call stealing involve third-party billing and computer hacking. In the first, the thief has long-distance calls billed to someone else's number or a number that's been disconnected. Illegal third- party billing over $300 (a felony in the District, Maryland and Virginia) can sock a thief with a $1,000 fine and up to 15 years in jail.

Computer hacking is more sophisticated, though not difficult to pull off. The chief offenders are often teen-agers and college students who use personal computers armed with special software (which some hackers sell or give away via computer bulletin boards). By breaking into a phone company's system, they can rapidly search through lists of long-distance access codes until they connect with valid ones. (Maybe yours. Have you checked your phone bill lately?) The codes are then sold or passed around to friends.

Once the purloined codes start making the rounds, the total of illegal calls can blast through the roof. Last year, 415 students at a local university were nailed by MCI after stealing $25,000 worth of phone time with computer- generated codes and telephone credit cards stolen from mailboxes; 300 students at a Texas college got caught after taking Metromedia Long Distance for $100,000; and at a North Carolina university, 27 students were charged with stealing $600,000 in calls from MCI.

These students may have figured, as many phone hustlers do, that copping calls is an easy heist, that if you get caught, all you have to do is pay the bill. Wrong again. Investigators for the various Bell companies (who also act as agents for AT&T) are aggressive sleuths with long memories. They want the money you owe, but as a Bell Atlantic security brochure says, "They won't make a deal."

Ask the Maryland woman who not only had to pay for all her stolen calls, but also got fined and spent 90 days in the cooler. Or the 14-year-old hacker who had all his computer equipment confiscated, made restitution, paid a fine and spent his weekends doing community service.

Add to this the chance of getting a criminal record (C&P can lump stolen calls together to add up to a felony charge) and the shame and hassle of being prosecuted and -- well, when it comes to stealing phone calls, it's probably cheaper to get a part-time job to pay for your phone addiction. Or, to paraphrase an old street smart: Don't do the crime if you ain't got the dime.