Fraud & Identity Fraud & Identity

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April 18, 2017

Fraudulent A2P Messaging Results in Massive Revenue Leakage

When we think about fraudulent A2P messaging, we often think of the problems it causes for customers. Like me, you’ve probably received text messages you didn’t sign up for. Being on the receiving end of a few unwanted messages is annoying, but receiving several is even worse. Although this situation is unfortunate for customers, it’s 10 times worse for companies.

A2P messaging caused by grey routes can result in heavy fines and lost reputations for businesses. They are able to be fined because they’re out of compliance with the TCPA, which states that companies need to have consent from individual customers to send them messages, and the annoying nature of said messages hurts their reputation. Not to mention the fact that those message represent an even bigger problem: the company obviously doesn’t have anti-fraud solutions in place.

However, those fines are nothing when compared to the amount of money companies could be making from legitimate A2P messages.  An article from VanillaPlus comments on the amount of revenue leakage grey routes cause, saying, “According to CEO, Perry Offer, Dialogue Group estimates that as much as 70 percent of global A2P traffic is not being monetized by operators because of these grey routes, and ending such leakage is a revenue creation opportunity for MNOs of at least US$5 billion a year.”

A2P messages delivered via grey routes take advantage of traffic channels that are typically reserved for P2P communications. Since P2P connections don’t carry a fee, they turn out to be very profitable for the fraudster when used to deliver A2P messages. According to VanillaPlus, this is because “…they charge a transaction fee for each message they deliver to their customers, which is much lower than the recipient operator’s own ‘on-net’ A2P message termination rate.”

As a result, A2P messages created via grey routes result in massive revenue leakage because income that should flow to the mobile operators instead goes to fraudsters. It also makes the A2P market seem less legitimate because customers on the receiving end of fraudulent messages lose trust in the company and the entire process.

Although this is a serious problem companies are facing, there’s really only one way to defend against grey routes: anti-fraud solutions. Are your communication channels protected?

Edited by Maurice Nagle

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