When changing the dimensions of a Paragraph Text box the type inside the box is scaled. Is there a way to prevent this scaling from happening?
Use the Direct Select tool (White Arrow) and click on the edge of the box. Make sure the text doesn't highlight when doing this. If it does, it will scale when you scale the box.
Are you sure you are working with area rather than point text? If you have bounding boxes set to show, point text will appear as though there is a container when, in fact, there is none. Because there is no container defining bounds, point text will always scale, whether you use the bounding box handles with the selection tool or the free transform tool.
If you actually do have area text, the scaling behavior will depend on the tool you use. If you resize the container using the selection tool on the bounding box handles (or you use the direct selection tool on points or sides as Larry suggested), the text will reflow. If you use the free transform tool, resizing the container will scale the type.