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Adult Chat, Psychic Hotlines ‘Begging to Be Used for Fraud’
July 31, 2014 - News
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Adult chat and psychic hotlines are among the so-called “premium-rate" numbers that are attracting fraudsters.

That’s according to a new report commissioned by VoIP network management software developer TransNexus, which found that telecom fraud is soaring thanks to the use of premium-rate numbers.

Premium-rate numbers cost more than, say, a residential line. Part of the extra charge goes to the service provider and helps businesses pay for themselves with the incoming calls, TransNexus explained. Adult chat and psychic hotlines are two common uses of premium-rate numbers.

Well, now, TransNexus has discovered that premium-rate numbers 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," said Jim Dalton, president of TransNexus. "The premium rate number business model made sense before VoIP technology was available. Now, a whole ecosystem has evolved that makes traffic pumping fraud to premium rate numbers an easy endeavor for anyone."

These days, fraudsters can hack into a phone network, use stolen equipment, or just use deceptive practices to generate traffic to premium-rate numbers, TransNexus said. As a result, a company can rack up tens of thousands of dollars in fraudulent charges. Service providers often try to collect on those charges, but that’s not been too effective to date. Companies and consumers tend to see fraudulent phone charges as the responsibility of the operator, much as they view credit card companies as liable for identity theft.

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