Fraud is one of the biggest areas of revenue loss for the telco industry and one we could do more to prevent.
Every year fraud costs our industry nearly $US300 billion globally, with carriers, service providers and sometimes customers footing the bill.
And in a worrying trend, fraud is becoming more prevalent. Research from the Communications Fraud Control Association (CFCA) found 88.9 per cent of businesses thought global fraud trended up or stayed the same in 2015.
This is because fraud remains a lucrative business for perpetrators, with high rewards and low risks. For example, there’s a plethora of jurisdictions involved in international roaming which makes it almost impossible to get a conviction.
Therefore it’s up us, the industry, to stub it out.
How do we know what to look out for?
There are many different forms of telco fraud, which means preventing it is a diverse and complex challenge for network and service providers. However, most fraudulent activity is related to International or Domestic Revenue Share Fraud (IRSF & DRSF) or commonly known as Roaming fraud.
IRSF occurs when fraudsters flood traffic to overseas or local premium-rate service numbers. By directing traffic to these numbers, fraudsters can generate profit from between 30 per cent and 80 per cent of the net tariff. With calls to some countries costing in excess of $5.00 per minute, you can see how bills quickly build up.
For SMBs and large enterprises, their traditional business processes and modes of engagement rely on telephony infrastructures where something called PABX hacking can occur.
So, how does PABX hacking work? It is typically associated with downloads or hardware that form part of the voice network. Fraudsters will search for numbers within the network that are no longer used but haven’t been properly disabled. Once found, calls can be automatically forwarded onto premium-rate numbers by using what’s known as short codes. Businesses remain completely unaware these calls are taking place until it’s too late. It’s worth noting that although suspected fraudulent services will be blocked at carrier level, it remains the customer’s responsibility to ensure a secure PABX.
Other types of fraud can include:
Encountering any of the above is costly for businesses, not only financially but also in brand reputation. And it often leads to difficulties around defining who is viable for the costs incurred - the wholesaler, service provider or customer?
It’s important for us to work together
In many cases relaxed vetting can result in delayed action against fraud, by which time the wholesaler, service provider and customer could be out of pocket.
Rather, responses should be immediate and built around the following processes and programs for roaming fraud.
The Near Real Time Roaming Data Exchange (NRTRDE), Mediated Usage Records (MURs) and CAMEL Application Part, are a few examples of solutions that make tracking customer call records simpler. Network and service providers can get access to full customer call records within hours, empowering them flag and stop fraudulent activity in almost real-time.
A basic procedure that should always be communicated with end customers to guard against PABX hacking is to make sure all telephony equipment is protected. By applying simple PIN numbers to voicemail, frequent PIN number changes, and disabling lines no longer in use, providers can hinder fraudster’s attempts to infiltrate the network.
For more advice on how you can help further protect your network offerings, please speak to Optus Wholesale Account Manager. Find out more about Optus Wholesale