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Released 12/14/92     The REAL WORLD textfile subseries:


*ITSR003.TXT *The iTS REAL WORLD Series*
This iTS report will contain text recorded from actual 'Real World'
publications.  Such major publications as Business Week and the New York
Daily Times will be monitored for any reports of investigations, busts, or
legislative action regarding phreaking.  Consider this your 'outside source' to
the most current information available regarding our Judicial System and how
it reacts to phreaking.

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Forbes - December 21, 1992 page 189


"Why cybercrooks love cellular"
-------------------------------

        Cellular phones provide cybercrooks with golden opportunities for
telephone toll fraud, as many shocked cellular customers are discovering.  
For example, one US West Cellular customer in Albuquerque recently received
a hefty phone bill.  Total: $20,000.
        Customers are not helf responsible when their phone numbers are 
ripped off and misused.  But you may be forced to have your cellular phone
number changed.  The cellular carriers are the big losers-to the tune of an
estimated $300 million per year in unauthorized calls.
        How do the crooks get the numbers?  There are two common methods:
cloning and tumbling.
        Each cellular phone has two numbers-a mobile identification number
(MIN) and an electronic serial number (ESN).  Every time you make a call, the
chip transmits both numbers to the local switching office for verification
and billing.
        Cloning involves altering the microchip in another cellular phone so
that both the MIN and ESN numbers match those stolen from a bona fide custo-
mer.  The altering can be done with a personal computer.  The MIN and ESN
numbers are either purchased from insiders or plucked from the airwaves with
a legal device, about the size of a textbook, that can be plugged into a 
vehicle's cigarette lighter receptacle.
        Cellular companies are starting to watch for suspicious calling 
patterns.  But the cloning may not be detected until the customer gets his
bill.
        The second method-tumbling-also involves using a personal computer to
alter a microchip in a cellular phone so that its numbers change after every
phone call.  Tumbling doesn't require any signal plucking.  It takes advan-
tage of the fact that cellular companies allow "roaming"-letting you make 
calls away from your home area.
        When you use a cellular phone far from your home base, it may take
too long for the local switching office to verifty your MIN and ESN numbers.
So the first call usually goes through while the verification goes on.  If 
the numbers are invalid, no more calls will be permitted by that office on
that phone.
        In 1987 a California hacker figured out how to use his personal 
computer to reprogram the chip in a cellular phone.  Authorities say one of
his pals started selling altered chips and chipped-up phones.  Other hackers
figured out how to make the chips general new, fake ESN numbers every time
the cellular phone was used, thereby short-circuiting the verification pro-
cess.  By 1991 chipped-up, tumbling ESN phones were in use all over the U.S.
        The cellular carriers hope to scotch the problem of tumbling with
instant verification.  But that won't stop the clones.
        How do crooks cash in?  Drug dealers buy (for up to $3,200) or lease
(about $750 per day) cellular phones with altered chips.  So do the "call-
sell" crooks, who retail long distance calls to immigrants often for less
than phone companies charge.  That's why a victim will get bills for calls
all over the world, but especially to Colombia, Bolivia, and other drug 
exporting countries.  
               

Researched by:
Night Shade [iTS]
