FIRESIDE CHAT: Outrageous phone bills stun businesses targeted for ‘SMS toll fraud’

SMS toll fraud is spiking. I learned all about the nuances of deploying – and defending – these insidious attacks in a recent visit with Arkose Labs CEO, Kevin Gosschalk, who explained how the perpetrators victimize businesses that use text messages to validate phone users signing up for a new account.

The fraudsters set themselves up as “affiliates” of phone companies in Indonesia, Thailand and Vietnam and then use bots to apply for online accounts, en masse, at a targeted business. The con: each text message the business then sends in return — to validate the applicant — generates a fee for the phone company which it shares with the affiliate...