Fraud


New technologies, new vulnerabilities


With the world of telecoms becoming ever more complex, the opportunities for fraud have increased dramatically. Alun Lewis discovers some of the ways criminals are taking advantage of the changing wireless landscape


W


hen it comes to linking rip-off s and mobile comms, the average man in the street would probably consider


the phone operators as the villains of the piece. Having heard all the horror stories about data roaming and application charges reaching tens of thousands of pounds – or handset insurance and tariff plans being mis-sold to ignorant punters – the thought that these service providers might themselves be haemorrhaging money to crooks would come as quite a surprise. Companies in most sectors are usually very


reticent when it comes to talking in public about losses that they have experienced and the telco world is no diff erent. Step behind the scenery however and what research is available shows that the fi gures for fraud and other losses are startling in both scale and scope. According to research by Juniper Research,


‘revenue leakage’ – the polite term that describes both actual fraud as well as losses incurred as a result of ineffi cient billing systems – added up to around $58 billion during 2011 alone – a sum


14


that represents around six per cent of the total turnover of the world’s mobile operators. More recent research by the same company suggested that as a result of new devices, technologies and business models being introduced – and with a potential failure of billing systems and revenue as- surance practices to keep pace with these changes – billing error and fraud losses could escalate to over $300 billion by 2016, around a quarter of the world’s total mobile revenues. A ‘non-trivial problem’, as it might be described with a typical engineer’s understatement. While it is inevitable that fraud of some kind


will almost always happen whenever you bring humans and money into close proximity to one another, truly aggressive telecoms fraud is relatively new. T e deregulation of the world’s telecom spaces during the 1990s and the death of the national monopolies led to the emergence of literally thousands of new operators of all shapes and sizes – a few of whom saw only too clearly that extra money could be made in a number of ‘creative’ illegal or semi-legal ways.


Keeping the hippies out of


the exchange Before that, during the 1960s and 1970s, ‘phone phreaking’ as it was known was more an activ- ity carried on by what could be described in retrospect as the very fi rst hackers. T e switch- ing technology of the time was controlled by in- band signalling using audio pulses and the phone phreakers were able to exploit this to make calls around the world for free. It is a colourful and relatively benign history to look back upon, com- pared to today’s world where organised crime, terrorism and money laundering frequently intersect with telecoms fraud. One (in)famous phreaker was blind from birth, but could whistle at perfect pitch and discovered as a child that he could control the phone network. Another was known as ‘Captain Crunch’, after a children’s breakfast cereal that unknowingly gave away a toy whistle that also imitated the signalling tones. T is amateurism soon shifted into a higher gear with the introduction of ‘bluebox’ tone genera- tors; the idea of playing Robin Hood to Ma Bell’s


LAND mobile August 2013


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36