Feeds

Telecoms fraud costs $55 billion a year

Phreaking hell

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

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

Build a business case: developing custom apps

More from The Register

next story
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
'Things' on the Internet-of-things have 25 vulnerabilities apiece
Leaking sprinklers, overheated thermostats and picked locks all online
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Tor attack nodes RIPPED MASKS off users for 6 MONTHS
Traffic confirmation attack bared users' privates - but to whom?
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.