What is the encryption method called when pseudo-random numbers are used instead of true random numbers?
Synchronous stream cipher, or just stream cipher.
In a synchronous stream cipher a stream of pseudo-random digits is generated independently of the plaintext and ciphertext messages, and then combined with the plaintext (to encrypt) or the ciphertext (to decrypt). In the most common form, binary digits are used (bits), and the keystream is combined with the plaintext using the exclusive or operation (XOR). This is termed a binary additive stream cipher."