MyNetPhone VoIP carrier subsidiary SymbioNetworks has revealed that it blocked over 10,000 attempts by scam operators to place fraudulent calls via compromised Australian routers and PABX systems during the holiday long weekend.
Rene Sugo, chief executive of Symbio’s fraud detection software division, TollShield, said that the 10,655 fraudulent calls would have generated about 100,000 call minutes and an average loss of 50 cents each.
Toll Fraud he said was a relatively invisible but very lucrative source of funds for highly organised criminal gangs (mostly operating out of poorly regulated Eastern Block countries).
According to the Communications Fraud Control Association’s latest report on toll fraud, last year criminal stole $US38 billion dollars from telecommunications providers and their customers.
“You could almost build a whole NBN just for the cost of the fraud globally,” Mr Sugo mused.
Mr Sugo said that he was familiar with cases where businesses using compromised routers and PABXs had been hit with bills of up to $50,000 from fraudulent calls routed very their customer premise equipment.
New Zealand telco Spark caused a furore last month when it announced that it would charge business customers $NZ2 per month to “protect” them from growing losses attributed PABX fraud (a common form of toll fraud) unless they chose to “opt-out”.
Mr Sugo said that, privately, Australian carriers - and those in other jurisdictions that Symbio has spoken to - will admit the problem is common on their networks. However, officially, they won't admit to having a problem.
“That’s the official line from the big telcos… and technically what they’re saying is correct. They don’t have a fraud problem but their customers do. So, when a carrier says ‘(we) don’t have a fraud problem’ that typically means is that they enforce the billing on the end users so the end user gets hit. They’ve got records and they’ll take the hard stance about it,” Mr Sugo said.
Australia’s peak telecommunications lobby group, Communications Alliance, did not respond to requests for comment.
Telecommunications consumer advocacy, the Australian Communications Consumer Action Network, was also unable to respond to requests for comment due to a lack of information shared by carriers.
Mr Sugo’s explanation of how the scams operate painted an alarming picture of the ease with which criminal gangs can orchestrate the fraud.
Typically the gangs scan the internet for compromised routers and PABX systems, establish a flotilla of them and then purchase phone numbers in poorly regulated jurisdictions.
They then on-sell call minutes at a discount rate via the numbers, which then appear on bills of victims at rates levied by their own providers. Some, Mr Sugo, said use the numbers to establish sex call lines and other information services charging up to $US5 per minute generating large profits.
Telcos have barely any visibility on the cost of the fraud because they’re lost among billions of minutes tolled across international transit networks that can take them months to settle with other providers.
The gangs have usually shutdown their operations and disappeared before local authorities can detect them, Mr Sugo said.
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