Fraud & Identity Fraud & Identity

Fraud & Identity Featured Article

August 24, 2017

Let Real-Time Fraud Management Save You

Fraud prevention is to business as a term paper is to your typical student. It’s possible to work on it and really get something accomplished. But it can be really tough just to get started.

Yet procratinating on both fronts can create new and even tougher challenges.

Just consider international revenue share fraud and subscription fraud in the telecommunications arena. Addressing it early and often can enable carriers and mobile virtual network operators to avoid significant losses.

That’s important, because such losses can add up quickly for organizations that don’t have real-time data feeds and fraud management systems in place.

As Jim Bolzenius, head of anti-fraud services at TNS, explained in a Comms Risk article last year, a fradulent phone reaching a $2 a minute destination and using a conference call functions to generate six calls or activate lines could lose around $360 in 30 minutes. That’s not ideal, but it isn’t horrific if you catch it that quickly, said Bolzenius of TNS, which provides clearing/settlement, information validation, interoperability, roaming, and signaling solutions.

However, organizations that don’t do real-time monitoring, but instead wait a couple days for CIBER or TAP records, could see their fraud losses mount to become much steeper, he said. For example, one account could ring up $34,000 in losses – for just one phone with a six-way conference feature.

“Now imagine your subscription fraud account had 10 phones with a six-way conference call feature,” he added. “Well, you’re then talking about $300,000 in a matter of two days!”

Here’s how this kind of thing works from the fraudster’s perspective. With IRSF, a fraudster may work with a local exchange carrier in a country with a high exchange rate, such as Gambia, Latvia, or Somalia, in some cases these LECs are government owned, so seeking help from government officials is a non-starter.

“To generate traffic, the fraudsters use a conference call line, a hacked PBX, stolen wireless service, or a variety of other means to push traffic to these high rate destinations,” he explained. “And then the terminating carrier splits the revenue with the fraudster who generates all of the calls.”

Meanwhile, the home carrier loses money.

Edited by Maurice Nagle

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