What telecom operators can do to combat fraud?

Mobile user in Africa
With the rise of LTE across the globe, and especially with the rise of VoLTE and 4G services in India, the threat of LTE Roaming fraud is going to be more prevalent than ever going forward.

Katia Gonzalez, head of Fraud Prevention Operations at BICS, believes that operators and carriers need to collaborate more, and be more proactive to combat this threat, and beat fraudsters at their own game.

Through this, operators can make vast savings in an increasingly tight-margin driven industry, but also greatly improve customer experience, as fraudulent activities can be rectified before the customer is even aware it is happening.

The telecoms ecosystem is becoming an increasingly challenging one across many markets globally. New streams of revenue are becoming increasingly difficult to find, margins in mainstream telecoms services are no longer as large, and competition is fierce.

The question of increasing profitability in this sector means improving revenues from existing areas – where normally they have been eroded and diminished. Unfortunately one of the most prevalent areas of revenue loss is highly damaging one: Fraud.

Fraud aimed at mobile carriers is not a new problem. Billions of pounds are reportedly lost on an annual basis due to this kind of illegal activity, which is only really the tip of the iceberg as the nature of fraud means that specific evaluation of the problem is difficult to make. The whole industry suffers; carriers, operators and subscribers alike, but unfortunately companies are sometimes reluctant to share details of failings. With their reputation at stake, peers, stakeholders, and customers will take notice of any negative events and react negatively towards them.

However, this problem is not going away any time soon. It is only through collaboration and by sharing information including incursion patterns and details of defensive aspects, that solutions to this complex problem can be found.

Collaborate to protect

For operators, the notion of collaboration and proactivity is key to keeping fraud at bay. Earlier this year, a well-known French operator reportedly saved around €130k in Q1 due to this proactive way of thinking. These savings were made possible by crowdsourcing information on fraud attacks with operators worldwide such as incident profiling, originating numbers and geographical origin. All this intelligence can then be used to combat telecoms fraud, leading to action before the customer is aware of the attack.

The importance of collaboration has started to be recognised across the industry which is increasingly important given the rise of international roaming fraud. Roaming fraud is a popular area for fraudsters where operators tend to be traditionally quite exposed, as it takes longer to detect than domestic fraud. In most cases when it eventually does get detected, a few hours’ worth of traffic has already passed through the network causing huge revenue losses of up to €400k. With potential revenue losses of hundreds of thousands of pounds, these attacks highlight the need to proactively combat fraud, before this scale of damage is experienced.

Fraud is approaching its summit

Whilst the shift towards all-IP networks is allowing operators across the globe to make strides in progress, it has also benefitted fraudsters. There is an increasing amount of IP-enabled equipment available to those wanting to conduct fraud attacks, and this has changed the global fraud landscape for the worse. But the increased data gathered from these IP attacks does have its advantages for those combating fraud in the industry.

A larger number of perpetrators means more data to analyse. For crowdsourcing-enabled tools that track the more prevalent types of fraud schemes this is ideal. Ultimately this will aid in the fight against criminal activity. Blocking numbers associated with attempted attacks and compiling them for the greater good will contribute to a more resilient telecoms ecosystem.

New variants of fraud are created but also exposed all the time. As IP-access networks are more and more common, fraudsters use this to their advantage, as intensity of attacks in numbers and reach becomes greater and greater. As fraudsters get smarter, so must operators and carriers.

Some of the more common types of fraud that collaboration can overcome are:

International Revenue Share Fraud: One of the most damaging and difficult to prevent frauds, various techniques are used to encourage fraudulent international calls which are then routed to premium rate numbers or to countries with high termination fees such as Cuba or Satellite destinations, often through a number of international operators. By routing to the most expensive destinations, criminals have the opportunity to create large charges very quickly.

Wangiri: A large number of calls are made at random and cut off after one ring in an attempt to get the recipient to return the call which is then connected to a premium number. This type of activity is now being expanded to target users of OTT services by sending messages asking for an urgent call which then leads to a premium rate number.

PBX hacking: One of the oldest forms of telecoms fraud which occurs when hackers target Private Branch Exchanges and make a high volume of calls to premium rate or overseas numbers.

False Answer Supervision: Here, traffic is intercepted by a third party that claims the call lasts for longer than it actually does, has been established before it has been, or has been answered when it has not. The charge is then made for the increased call time, or for calls which never took place.

Wholesale carriers have already begun, and are in an ideal position, to monitor attacks. They can analyse information from around the world, and create actionable data from fraud attacks, both successful and attempted. This allows operators to proactively defend themselves against current threats, and also pre-empt fraud trends that other operators are experiencing across the globe, ultimately leading to a fairer and safer industry.

By Katia Gonzalez, head of Fraud Prevention & Services at BICS

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