Date: 13 Dec 92 14:00:21 EST
>From: Gordon Meyer <72307.1502@COMPUSERVE.COM>
Subject: File 2--Cellular Phone Fraud & Countermeasures (CU News)
 
Industry sponsored studies on the amount of money lost to fraudulent
calls vary, as they do with estimates of computer crime and software
piracy, but one figure from the Cellular Telecommunications Industry
Association (CTIA) places the cost at somewhere between 100 and $300
million annually.  Other estimates are as high at $600 million.
 
Typical methods used to obtain service for free include paying off
company employees to provide the all-essential ESN (Electronic Serial
Number, a unique identifier transmitted with each call that identifies
who is placing the call.), to 'cloning' ESN's from existing phones,
sometimes using radio receivers to evesdrop on cellular traffic and
copy the ESN from other calls.
 
Earlier this year the Secret Service raided homes in Phoenix and
confiscated 35 phones, 10,000 microchips, and other equipment used to
steal cellular service.
 
The El Segundo based Computer Sciences Corp has recently released an
Artificial Intelligence based device that attempts to thwart
fraudulent activity by maintaining a data base of calling patterns for
a particular ESN.  When the pattern of activity changes, the cellular
company is notified that the ESN may have been compromised.
 
The CTIA has set up a fraud task force, with an annual budget of $4
million dollars, to help fight the problem.  Individual cellular
companies have also established their own fraud investigation units.
Unlike the long-distance industry, cellular companies do not have a
policy of holding the customer responsible for fraudulent calls.
 
For more information read "Stop, Thief!", Information Week,
                                          November 30, 1992. pg. 32
 
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