Teenage hacker's fake chatline cost BT pounds 50,000

A 17-year-old computer hacker yesterday admitted setting up a fake chatline as part of a sophisticated telephone fraud that cost British Telecom at least pounds 50,000.

In a remarkable show of technical expertise, he made the chatline route calls through Guyana, while paying him the "proceeds". He also used two "cloned" mobile phones to boost the chatline's business.

The teenager, an A-level student who lives with his grandmother in Carlisle, Cumbria, was able to use the system for a month before BT's special investigations unit tracked him down. "He could have cost us a lot more than he did," said a BT spokeswoman. "We did well to catch him when we did."

The boy, who cannot be named for legal reasons, admitted at Carlisle Youth Court one specimen charge of false accounting and another of fraudulent use of the telephone system in January and February of this year. Sentencing was delayed to 19 July. The maximum penalty is 12 months in a young offenders' institution, or a fine.

The boy hacked remotely into a BT corporate switchboard at an office from his home by using a computer program which dials through all possible sequences of numbers. With this he was able to discover a password code, or PIN, which allowed him to use a facility built into the exchange letting him make phone calls all over the world at BT's expense. Using the PIN, he also set up a fake chatline on the exchange.

Separately, he used two mobile phones, which had been "cloned" from unwitting legitimate owners, to call the chatline continuously, generating revenues on the chatline and payable to him - and further raised these by routing the chatline through exchanges in Guyana. BT pays the operator of a chatline a proportion of its revenues: the boy stood to receive pounds 20,000.

By programming the exchange to make no charge for calls he made, he also won pounds 4,000 from other chatlines. He used the money to buy meals and presents for friends. BT is thought to have caught him by spotting unusual dialling patterns from the exchange.

The techniques are all common in telephone fraud but their combination is unusual.

"This boy could have defrauded any business which relies on computers and PIN codes," the BT spokeswoman said. "I imagine when this is all finished he will probably have a future in computers somewhere because he is a very clever lad."