Opinion: Fight the fraudsters the collaborative way

telecoms, security

By Katia Gonzalez, Head of Fraud Operations at BICS

One of the major challenges facing the telecoms industry at present is protection against fraud.

As the market becomes more crowded and competitive, with margins becoming increasingly slim, revenue stream protection, rather than creation, is now the name of the game.

When it comes to protection, international telecoms fraud costs the industry an estimated €34.5 billion a year, while the annual cost of roaming fraud exceeds € 5.4 billion globally, according to the Communications Fraud Control Association (CFCA).

Fraud is a global problem and can originate anywhere, often at a great distance from the target, and therefore demands a global, collaborative response.

The most prevalent international fraud scheme to take hold in recent years is International Revenue Share Fraud (IRSF) with an increase of 500 percent in the past three years.

This fraud is facilitated through a number of scams such as PBX hacking, SIM card cloning, and Wangiri.

IRSF is perhaps the most damaging – and commonplace – fraud scheme, which involves encouraging fraudulent international calls which are then routed to premium rate numbers or to countries with high termination fees, usually through a number of international operators.

IRSF involves a high number of often very long calls and while it is not difficult to detect IRSF, significant charges can amount quickly for all parties involved, from the end-user to the operators and carriers.

An effective way that fraudsters have found to ‘force’ these international calls in an IRSF scheme is Wangiri.

Wangiri (meaning ‘one and cut’) involves automatically dialing a wide selection of numbers, with the end-user receiving this as a missed call on their device.

When the user returns the call they are directed to a premium-rate line, with the revenue directed to the perpetrator and the call paid by the end-user.

Alternatively, Wangiri also happens through SMS, with the end-user receiving messages asking them to call back a specific number.

Criminals are quick to adapt to developing technologies and industry trends, illustrated by the frequency of roaming fraud cases.

It’s been reported that data roaming traffic is tripling year-on-year across networks globally, due to the increasing demand from subscribers wanting access to next-generation data-driven services abroad.

Although roaming fraud can be detected, traditionally this remains an area where operators remain quite exposed.

Such schemes often take longer to identify than traditional international and domestic fraud, and as such fraudsters are using this scheme to fuel IRSF with potentially catastrophic consequences for operators.

These delays in incursion identification can account for significant losses to operators; in one incident a €400,000 loss was reported over a single weekend.

Telecoms businesses already operate in a competitive marketplace in which acquiring and retaining customers is a crucial part of sustaining a successful business.

Significant fraud incidents can harm an operator’s reputation and brand image, damaging the customer-operator relationship, but also internal relationships with stakeholders.

Faced with increasingly tight margins, operators have found themselves spending more and more of their time plugging revenue leaks to maintain profits, rather than creating new revenue generators.

Fraud in the telecoms industry is ubiquitous, so proactive prevention needs to be a central part of any operators’ business strategy.

Having safeguards to protect from the initial threat is much more cost effective than reactive post-attack measures deployed in an attempt to repair damage and recoup lost revenue.

The problem requires a global response from operators and wholesale carriers alike: meaning cross-border collaboration, crowdsourcing details of potential fraud attacks, and shared monitoring and analysis of data.

With the adoption of crowdsourced platforms it is now possible to track fraudulent activity across networks by drawing on the collective knowledge of global operators.

This massive data resource is constantly being updated and provides the very latest information regarding illegal behavior and trends.

As the number of operators connected to the platform grows, more accurate data and information is made available to allow service providers to act if they detect any fraudulent activity.

Giving the means to identify and block activity to known fraud destinations, protecting themselves and all of the other members from future attacks.

When an operator suspects fraudulent activity, it can block the fraudulent number or blacklist and monitor it for related traffic to detect similar trends elsewhere on the network.

By sharing information, the number can then either be blocked by the carrier’s wholesale provider or through a firewall located within its own infrastructure.

This collaborative approach can highlight potential problems quickly and suppress the spread of fraud schemes globally to mitigate revenue loss.

French telecoms provider Bouygues Telecom is one operator to have seen the potential in a collaborative and proactive attitude towards fraud protection solutions.

Using a crowdsourcing fraud prevention platform, the operator was able to block 200 attacks against its network in the first three months of 2016, saving an estimated €130,000.

Developments in telecoms technology are matched by evolving fraud schemes.

Without the resources to track and monitor adapting schemes alone, operators should instead focus on global collaboration and cooperation in order to prevent fraud attacks, and create a fairer and safe industry.

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