When it comes to transmission over internet, security is the major concern that pops up. It is an astonishing fact that there are many business firms today are still using the traditional phone lines for carrying out private conversations. The reason is quite obvious. Hosted PBXVOIP though has gained great popularity but it has still not won over the confidence of its users in terms of security and reliability. To do away with this threat, different probable attacks on Hosted PBX systems using VOIP have been analyzed and secure mechanisms have been implemented to do away with these issues. Now, the data or voice transmission over the internet is compressed and encrypted with the latest algorithms thereby delivering security and reliability to users. So, now PBX VOIP can be used for transmission of confidential data as well.