Feeds

Telecoms fraud costs $55 billion a year

Phreaking hell

  • alert
  • submit to reddit

Remote control for virtualized desktops

Phone companies estimate that global telecommunications fraud is running at $55 billion a year.

The estimates comes from a telecoms industry group the International Forum of Irregular Network Access (FIINA), whose members include fraud experts at service providers throughout the world. The figures for fraud, which FIINA admits are not precise because they make assumptions about how much offences against business go unreported, estimate that telcos themselves lose as much as 6 per cent of revenues to fraud.

The figures, reported by the Telegraph, include many different types of fraud including those involving mobile phones, premium line misuse and phreaking, which can be used to obtain free telephone calls at the expense of either telcos or by exploiting corporate phone systems.

Neil Barrett, technical director at security consultants Information Risk Management, explained that phreaking is the process of manipulating the phone system electronically, normally by sending additional control codes down phone lines to obtain free access.

"This is a piece of cake and the emergence of digital technology in exchanges has not really made it that much more difficult," said Barrett.

He explained that once free access to a phone system had been obtained, it might be sold on to people willing to pay criminals for cheap rate phone access overseas. Alternatively phreaking may be used to obtain free net access in European countries or out of "sheer buggeration", he said.

Barrett believes the cost to enterprises from phone misuse is probably only a small fraction of the $55 billion figure quoted in the study but he believes it is still a real and growing problem.

"With badly managed PBX systems it's dead easy to manipulate them to get free calls," said Barrett.

He explained this was normally done by crackers manipulating system so that inbound 0800 calls could be redirected to external lines, using features normally geared to transferring calls from office phone numbers to mobiles.

Attacks on voicemail systems were also a problem for companies because they would give access to audio storage capacity that can be used to host anything from MP3 files to audio porn.

"Voicemail systems are also normally only defended with a four digit PIN so they can be broken into in a night of 'war dialling'," said Barrett.

With telecoms fraud becoming more sophisticated and organised crime entering the arena, the message seems to be that firms need to devote attention to the security of their phone systems as well as their computer networks. Failure to do so can result in a very nasty surprise when the phone bill arrives. ®

Related stories

Legendary phreaker Captain Crunch sets up security firm
MostHateD in gaol for burglary

Internet Security Threat Report 2014

More from The Register

next story
Webcam hacker pervs in MASS HOME INVASION
You thought you were all alone? Nope – change your password, says ICO
You really need to do some tech support for Aunty Agnes
Free anti-virus software, expires, stops updating and p0wns the world
Meet OneRNG: a fully-open entropy generator for a paranoid age
Kiwis to seek random investors for crowd-funded randomiser
USB coding anarchy: Consider all sticks licked
Thumb drive design ruled by almighty buck
Attack reveals 81 percent of Tor users but admins call for calm
Cisco Netflow a handy tool for cheapskate attackers
Privacy bods offer GOV SPY VICTIMS a FREE SPYWARE SNIFFER
Looks for gov malware that evades most antivirus
Patch NOW! Microsoft slings emergency bug fix at Windows admins
Vulnerability promotes lusers to domain overlords ... oops
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Reducing the cost and complexity of web vulnerability management
How using vulnerability assessments to identify exploitable weaknesses and take corrective action can reduce the risk of hackers finding your site and attacking it.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.