I understand how these call would cost Instagram/Google/Microsoft money. But, could someone please explain why a call to a premium number "earns" the account holder money?
So you can obtain a premium number, and then when anyone calls you on that number they get charged the rate that you set per minute and after fees, you get the money. That's how pay per minute phone services (esp. adult services) work.
So what he did was to get one of those numbers and then have Google / Facebook / Instagram call that number repeatedly and that's how he would get money.
But the phone company requires ID and bank info to obtain a premium number. And then when you do this, google calls them to complain, and phone company terminates your account, keeps the money, and reports you to the police for fraud. Doesn't seem like a very good exploit.
This isn't true. You can get such numbers all over the world; some you can sign up for online and provide reasonably anonymity. You can make a lot money doing scammy-stuff and the risk of being prosecuted is pretty low. It's just not worth trying to go after some guy with an account with a telecom in Elbonia.
The cases of telecom fraud that I know of that were caught are usually due to incredible arrogance on the perpetrator's fault. In one case, he actually called the company he was attacking to gloat that they could never get him. (The company used a super-vulnerable-yet-expensive switch that literally had bugs like "&admin=1 gets superuser".) I've not seen a VoIP system that was remotely secure.
The account holder is the operator of the premium number. When they set up the premium number, they receive a large portion of the fees of any calls to that number.
So what he did was to get one of those numbers and then have Google / Facebook / Instagram call that number repeatedly and that's how he would get money.