New Report Exposes Threat of Telecom Fraud from Premium Rate Numbers

A new report from TransNexus examines the growing problem of telecom fraud stemming from the use of premium rate numbers.

Premium rate numbers have long been a staple of the telecom industry. These numbers charge a higher than normal rate and part of that extra charge is paid to the service provider, enabling businesses to be funded via the calls. Adult chat lines and psychic hotlines are very common uses of premium rate numbers.

According to the report, the problem with premium rate numbers is that they are easy to exploit. The money that is paid to the “business” acts as a strong incentive to pump traffic to a phone number. Traffic pumping, or access stimulation, is a scheme in which a fraudster uses inappropriate means to artificially inflate traffic to their premium rate number.

“Premium rate numbers are begging to be used for fraud,” says Jim Dalton, president of TransNexus. “The premium rate number business model made sense before VoIP technology was available. Now, a whole eco-system has evolved that makes traffic pumping fraud to premium rate numbers an easy endeavor for anyone.”

Fraudsters today can hack into a phone network, use stolen equipment, or simply use deceptive practices to generate traffic to premium rate numbers. The results can be tens of thousands of dollars in fraudulent charges. Because the general public looks at telecom fraud as similar to credit card fraud, as something for which they should not be liable, most service providers are unable to collect payment for the huge charges, and are instead stuck paying the bills themselves.

The new report details exactly how fraudsters are quickly and easily acquiring premium rate numbers, and includes call flow diagrams that illustrate the way that fraudsters are taking advantage of the current system.

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