Telecom Fraud is big business. Are you protected?

Telecom Fraud is big business. Capacity Magazine investigated how much progress the industry has made last year. According to them, the rising frequency and sophistication of fraudulent activity on networks is putting carriers under pressure to take action. Read full article here. A few weeks ago the FBI caught one of the biggest telecom fraudsters in the world. A cooperative effort of AT&T, the U.S. FBI and the Malaysian police department resulted in one of the most significant arrests ever related to telecom fraud. The alleged perpetrator is charged with participating in an international telecommunications scheme that defrauded victims of more than $50 million.

In my previous blog I mentioned the mind-blowing number of $46.3 billion in annual fraud losses incurred by the telecom industry, according to the Global Fraud Loss Survey 2013 of the Communications Fraud Control Association (CFCA). Last week, members and guests of the CFCA gathered in Las Vegas for their Winter Educational Event at which the CFCA announced a new global loss survey. The members of CFCA will be working together with many stakeholders in the telecom industry on a new version of the survey during the upcoming months.  Once this survey is available, I’ll share the outcomes in a new blog.

Last week at the CFCA event it became clear again that IRSF (International Revenue Share Fraud) is still the biggest challenge related to telecom fraud. Although there are many ways to gain illegal access to the telecom network, in most cases IRSF is used to monetize this access.

How does IRSF work?

Telecom Fraud Process

1. Fraudster compromises a telephone system to send premium rate number calls through operator A
2. Wholesale Carrier receives the call and sends the call to operator B
3. Operator B pays content provider providing the premium rate number
4. Content provider shares revenue with fraudster

In this case operator A won’t receive a payment from the fraudster but already paid their wholesale provider. This is how the fraudster makes money and Operator A faces a revenue loss.

For customers using our Fraud Management system, FraudAlert, we analyze all CDRs in near real time and generate alerts as soon as we detect fraudulent traffic. This gives them the opportunity to stop this traffic and prevent revenue losses. In our next release of FraudAlert, coming in May of this year, even more sophisticated options will be available to our customers.

Click here to learn more about  iBasis Fraud Protection Service offerings.

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