The First Telecoms Fraud
In the 1830s, two French brothers: François and Joseph Blanc, committed the first telecoms fraud.
The brothers were bankers working at the stock exchange in Bordeaux, trading primarily in Government bonds. The movements of these bonds were influenced heavily by what was happening further North in Paris. There was one problem though, messages on these market movements took about five days to reach Bordeaux. Anyone who could get details on the market movements ahead of their rivals stood to make a fortune. Many had tried, even using carrier pigeons. The Blanc brothers came up with a way of sending messages by ‘hacking’ the telecoms network of the day.
At the time France had the first National telecoms network , although it looked a little different to the telecoms networks we think of today. Instead of copper cable and distribution points, the French system used multiple series’ of towers with huge wooden signalling arms on the top to create an optical telegraph. Through various levers and pulleys, the arms on top of the tower could be moved into different positions to signify letters, numbers and even whole words. Operators in each tower would maneuver the arms of their tower to match those of the adjacent tower, sending messages down the chain like a Mexican wave. The first problem for the Blanc brothers was the Network was only for Government use and on the line from Paris to Bordeaux there was a station part way along where messages would be checked so any message snuck in at Paris would be intercepted and removed long before it reached Bordeaux. The second problem was that, due to the sensitive nature of the content being sent along the line, only operators at the start and end of the routes knew what the signals meant. There was one exception to this: the signal which meant ‘backspace’. If a signaler made an incorrect sign, they could follow it with backspace, letting the end tower know to disregard it when the message was decrypted. It was this that the brothers used to get their messages.
A contact in Paris would note movements in the market and send these with a messenger to a tower in Tours, South of where messages from Paris would be checked (problem 1 resolved). Here a tower operator (who had been well bribed) would convey these movements by putting intentional errors into messages that were being sent (problem 2 resolved). A third conspirator based near the final tower in Bordeax would watch the incoming message, keeping a look out for the error. Whatever signal preceded the backspace signal represented how the market was moving. when the message was decrypted at the final station in Bordeaux the erroneous signal was removed and no one was any the wiser.
The fraud worked for two years and, despite their rivals suspecting something was happening, the actual means of their success was only uncovered when one of the bribed signalers confessed all on his death bed (some reports say this was due to guilt, others that it was try to recruit his replacement). The brothers and their co-conspirators were arrested in 1836 but it seemed luck was on their side once again as, despite the towers being for Goverment use, there were no actual laws in place prohibiting their use for the sending of personal messages. The brothers ended up walking away free men (although the others weren’t so lucky because there were laws against taking bribes) and new laws were quickly put in place.
So what relevance does this hold for businesses today?
While the ways and means may have changed, telecom fraud is as much an issue now as it was back in 1830’s France. Here are some of the lessons we can take from the first telecoms fraud:
- Just like modern ways of sending data, the optical telegraph used a form of encryption to protect the content being sent along it, but all it took was the one known signal – backspace – for the hackers to find a way to infiltrate the network. It only takes a small flaw or weak point.
- The Blanc brothers plan may seem like a lot of effort just to get very basic messages BUT the pay off was huge. It is the same for today’s hackers. While it may take a fair bit of work, a compromised telephone system can generate tens of thousands of pounds in revenue in a very short space of time.
- Ultimately the weak link in the optical telegraph was the people operating it. A few bribes and the whole system was compromised. While bribery may not be the weapon of choice nowadays, people are still often a systems vulnerability. Using insecure passwords and codes (1,2,3,4 anyone?), revealing passwords to fraudulent callers and even malicious action from individuals against their own employer are some of the most common ways fraud happens.
- Laws aren’t always able to protect you. At the end of it all, even though the brothers were caught red handed, they got off free because of the laws and regulations of the time. While there are laws against hacking in place now, many fraudsters are not convicted as they operate abroad, away from the reach of the law. On top of this, if you are hacked you have to pay any call charges generated by the hackers and then attempt to claim them back. If you don’t, you could be the one in trouble with the law.
- At Deep Blue we try to do all we can to support and protect our customers. From expert engineers to help keep your telecoms and IT systems safe, fraud prevention plans on our hosted and IP products, call barring options and much more. We can’t stop fraud, but we can learn from the mistakes of the past to try to build a more secure future.