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VoIP phreakers establish thriving black market

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Internet Security Threat Report 2014

Telephone systems hackers have established a thriving black market in reselling stolen VoIP minutes.

Hackers are breaking into gateway servers used to connect a carrier's phone network to the internet and reselling this access to smaller, unscrupulous operators, sometimes via web-based wholesale minutes markets. Wholesale purchasers of the purloined access are often small telco operations who resell access to ordinary punters via printed phone cards.

These telephone phreakers steal 200m minutes a month, worth $26m, estimates New York telecom firm Stealth Communications.

Telecoms fraud is a well known, if under-reported problem, that pre-dates the internet by years. It is a multimillion-dollar business, with estimates of direct damages resulting from fraud varying from $35bn to $40bn a year.

This fraud comes in many guises of which the growing trade in VoIP phreaking is just one relatively small but growing component. Newsweek reports that uncovering the perpetrators of this illicit trade is extremely difficult, if not impossible.

A Panamanian telco that recently lost $110,000 as a result of VoIP fraud hired Hong Kong consultancy TSTF to track down the phreakers involved. The trail led through Bulgaria, Canada, Costa Rica, Hong Kong, and the US before going cold. Phreaker trails are far too complex to track successfully, Emmanuel Gadaix, head of TSTF, told Newsweek. ®

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