Telecom fraud continues to affect the business of mobile network service providers. All MNOs and MVNOs are susceptible to fraud, no matter what their size or where they are based. The major problem in preventing frauds is its continually changing nature, thereby making it increasingly difficult to identify the root cause.
Understanding the Changing Nature of Frauds
Traditional telecom frauds were mainly focused on the services offered by telcos such as voice. Fraudsters utilized these voice services to gain access to international dialing and attack voice revenue share services. However, with the rising trend of IP based calling systems and smartphone technology, the cost of international voice has dramatically reduced.
Advancements in technology has led to an onslaught of new types of telecom frauds. These tactics are complex in nature and make it difficult for telcos to track because of numerous layers of anonymity and its global nature. Fraudsters are experts in learning new technology and they search for innovative ways to outwit service providers by finding out possibilities of invasion in the system. They are now misusing mobile technology and focusing their efforts towards attacking the end consumers directly. Recently, it was observed that the revenue loss because of consumer based frauds such as account takeover or subscription, is higher than voice service fraud of IRSF.
Growth of Consumer Frauds
The rising number of consumer frauds is a critical issue in front of telcos today. What makes this issue worse is its complicated nature. Depending on the type of consumer-based attack, telcos could either be the target of attack, mode or method of attack or even the source of attack.
One of the major reasons behind the tremendous rise in targeted frauds is the growth of smartphone technology. Fraudsters get hold of high-end handsets through account takeover or subscription. In such cases, real identities are either stolen or utilized for opening new accounts. Fraudsters may also use existing identities to add extra services in the contract without permission. After acquiring equipment through existing accounts, fraudsters manipulate the competitive marketplace by reselling it in the international market for higher value.
These account takeover frauds where the existing account of customer is targeted have become more prevalent. One of the possible reasons for the growth of customer frauds is the simplicity to gain access to the existing accounts. Telcos are always in an endeavor to serve their customers with the quickest and simplest way to access their accounts and add new devices or equipment in the existing contract. This is the major reason why fraudsters get easy access to customer’s account. They take advantage of flexibility and identify the weak points to drill into the customer’s account.
With the rise of digitization, many service providers now use mobile phone as the point of contact for verification. For example, in order to make payments or access sensitive information online, service providers usually send One-Time Password (OTP) over text message or call. Mobile account of customer is fundamental to authentication in several services sector, making them highly susceptible to attacks by fraudsters.
Overall Impact of Consumer Frauds
The number of traditional frauds that directly affect the telecom space is reduced, but at the same time there is unprecedented growth of consumer-based frauds. The impact and consequences of new nature of hacking are faced by the customers of the telecom company. Though these attacks are not affecting the finance of telcos directly, they have a wider impact on the brand value. This poses a potential reputation risk for telcos and can lead to huge financial losses in the long run.
Managing Frauds and Mitigating Risks
Spreading awareness of the vulnerabilities in telecom network is essential to alert users of the recent frauds. Preventing frauds is possible with the combined efforts of telecom operators and consumers. First and the foremost measure is to purchase a solution with fraud management module from telcos.
Apart from having a fraud-proof solution, users should avoid being victimized by hackers by updating their system password from default to new, preferably a strong one that is difficult to crack. Do not forget to change passwords and PINs of virtual extensions and voicemails, which is a big open door for access to hackers.
It is recommended to lock calls to international numbers, if not used on a daily basis. This prevents hackers from gaining access to the system and making a large number of calls to international or premium rate numbers. It is also a good practice to check monthly bills in detail and identify suspicious calls to detect any fraud at an early stage.
Let’s Fight Against Frauds Together
Panamax believes that along with our business partners we can fight against fraud and make a safer virtual world. Hackers are constantly in search of new ways to attack carriers and customers, so coming together and fighting against it is critical to prevention of frauds. We care about our customers and protect them from telecom frauds by offering highly secured solutions with near real-time fraud detection module. BillCall is our Business Support System that provides fraud coverage to customers with its smart pattern rules, fraud tagging and alert engines. It provides monitoring and protection against handset fraud, dealer fraud, roaming fraud, high usage and subscription fraud.
Get in touch with experts at Panamax to know how our solution can help provide secured virtual footprints for your customers.