Proactivity and collaboration are key in the fight against telecoms fraud

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Katia Gonzalez Gutierrez, Head of Fraud Prevention Operations and Services at BICS, looks at ways in which the telecoms industry can collectively improve its ability to fight fraud.

Despite the maturity of the telecoms ecosystem, fraud remains a pertinent issue, and none so much as roaming fraud. An increasing problem costing the industry over US$6bn each year across the globe, according to the Communications Fraud Control association, roaming fraud and fraud originating from the operator’s home market are the biggest threats facing mobile service providers today.

A truly international problem impacting companies and subscribers across the whole industry, the prevention of fraud remains one of the biggest challenges facing telecoms. Operators of all sizes and MVNOs across the globe are having to fight increasingly sophisticated attacks from opportunistic criminals alongside traditional, well known types of fraud such as International Revenue Share Fraud (artificially inflated traffic to international premium rate numbers), PBX hacking (making a high volume of calls to premium rate or overseas numbers), SIM card cloning and Wangiri (where end-users are duped into calling premium rate numbers from automated missed calls or spam SMS messages).

Moving to all-IP networks has changed the fraud landscape and enabled hackers to increase their efficiency, the speed in which they can launch their attacks, and their ability to exploit operators at their weakest points. The increasing amount of IP-linked equipment has unfortunately improved the accessibility for fraudsters and additionally, as technology advances, these fraudsters are learning to adapt their attacks for maximum impact.

The prevalence of roaming fraud has increased since criminals have identified certain risks and vulnerabilities with next-generation technology that can be better exploited in the roaming environment. Attacking app communications companies and operators at their most exposed points can drain a telecoms company of hundreds of thousands of pounds, whilst also potentially damaging customer relations.

The international nature of roaming fraud has proved to take even longer to identify than traditional domestically originating fraud. The few hours delay between identifying and reporting the fraudulent activity amongst the involved operators allows a huge amount of traffic to pass through the network, which causes significant revenue loss – up to €400,000 over a weekend was recorded in recent incidents.

The one-off monetary losses suffered by operators pale into insignificance next to the potential injury of the delicate customer relationship which is the decisive component to a successful business. The acquisition and retention of customers is a top priority in competitive industries such as telecoms.

Fraud in the telecoms industry is not a new problem, but due to its nature and the number of new fraud variants continuously being developed, the true scale is uncertain. Some operators are not ready to divulge their vulnerabilities or details of any fraudulent attacks for fear of increasing customer churn and suffering even further revenue loss; and even if they are willing to share some details on fraud attacks suffered, some of these attacks still go unnoticed.

New streams of revenue for monetisation are increasingly difficult to find, and with margins squeezed by a competitive marketplace, operators are increasingly having to turn their attentions to preventing revenue leakage to improve profitability.

Proactivity and collaboration are key in the fight against fraud. As soon as any fraudulent activity is detected, operators are able to blacklist relevant addresses and numbers, and monitor for related traffic. By detecting similar trends and sharing this information with partner operators around the world, the identified illegal activity can then either be blocked by the carrier’s wholesale provider or through a firewall located in its own infrastructure.

This will then not only prevent future similar attempts on the targeted operator, but other operators are able to benefit from the information and proactively take preventative precautions. This collaborative relationship between operators brings them together as one to fight telecoms fraud.

At the centre of the industry, wholesale carriers are in prime position to monitor fraud attacks involving international traffic and analyse anonymised data from occurrences across the globe. If operators work together to share all the data on fraudulent activity, they will be helping others to proactively fight telecoms fraud too. Although operators sharing information on the fraud they have suffered will have to take a reactive approach, others will benefit from the information to protect their business proactively – and that is what working together is all about.

Katia is Head of Fraud Operations and Services at BICS, a leading global wholesale carrier in the Telecom industry. With more than 11 years of experience in the Mobile and Wholesale Telecom industry, Katia has held different positions in the Wholesale Carrier Business (i.e. trading manager, pricing manager and now Head of Fraud Operations and Services) that allow her to understand the various aspects of the business as well as its challenges. Katia also chairs the i3 Forum Fraud WorkStream, which brings together the communications expertise of more than 50 telecommunication providers, representing a combined retail base of over 1.5 billion customers across 100+ countries.