Voice over Internet Protocol (VoIP) is a popular communication choice, especially for small business seeking to streamline costs. For a number of criminal cells throughout the world, though, it’s also a cash cow. When a breach goes undetected, VoIP fraud rings can rake in the cash.
Fortunately, many of these rings do get caught. According to this New Straights Times report, one of the latest busts took place in Macao. In a joint operation between law enforcement entities in China and Malaysia, 51 members involved in the Macau Scam were arrested at their so-called call centers in Damandara and Petaling Jaya.
Authorities suggest these criminals were responsible for swindling millions of dollars from their targets in China. The story presented in the ruse was that victims were under investigation for criminal activities.
Criminals involved in this scam were able to spur individuals to action by telling them their existing bank accounts would be frozen during investigations. The story was so convincing that these victims then transferred their funds into a “safe account.” Once the ruse was discovered by the victims, the money was long gone.
In this situation, criminals used VoIP technology to make their calls. This type of VoIP fraud not only allowed the syndicate to operate under the radar, it also ensured they could easily relocate the operation to prevent detection.
But, there’s another important point in this story. Criminals committing VoIP fraud aren’t signing up for legitimate VoIP solutions and paying for the service. Instead, they’re using malicious software to navigate the VoIP industry to identify weak networks. A simple breach and the VoIP line is hijacked, allowing the crime ring to make all the calls they want without any of the cost.
The same approach is also used to commit VoIP fraud at the wholesale level. Connections breached by hackers are redirected to their own customers, allowing them to collect payment for VoIP access they don’t own. Such hacking has been shown to be easy for those who know what they’re doing. Plus, when monitoring is lacking on the provider side, a hacked account can go unnoticed for quite some time.
Fortunately, those companies implementing least cost routing have the potential to quickly identify when volume spikes on the VoIP line that isn’t caused internally. Such detection is critical as VoIP fraud complaints nearly doubled from 2010 to 2011. According to the AustralianCompetition and Consumer Commission (ACCC), nearly 20 percent of the fraud complaints captured in 2011 were the result of telecommunications hacking.
Least cost routing provider TransNexus (News - Alert) is taking the instance of VoIP fraud seriously. The company recently released a fraud detection module as part of its NexOSS product. This module not only detects spikes in traffic, it also automatically blacklists a suspicious route and suspends them from the routing table.
Tackling VoIP fraud from within the industry is critical. While service providers bear the cost of most instances on the front end, the overall cost is passed on to the customer in higher rates down the line.
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Edited by Rich Steeves