Fighting Telecoms Fraud: Seven Challenges That Service Providers Face and How to Overcome Them Today

Telecoms fraud and credit management

Why should resellers and service providers care about telecoms fraud?

Telecoms fraud results in damages that are twice the size of credit card fraud – around $25 billion per year – and continues to grow.

Added to this is the problem that Hosted UC and SIP service providers are already fighting to maintain high per-user profit margins in an increasingly competitive market. Revenue assurance departments attempt to increase that profitability by minimising losses – but for many providers toll fraud only enters the equation as an accepted and expected loss that’s simply too hard to tackle. This is particularly true for mid-size service providers with fewer resources but recent advances in technology mean that no longer has to be the case.

Fraud causes more damage than simply monetary. Fraud incidents cause disruption to business operations and strain relationships throughout the channel. By adopting a comprehensive anti-fraud solution, service providers can reduce customer churn as well as protect and increase profit margins.

Key challenges for telecoms service providers

  1. Synchronicity and speed of action

Fraud is fast moving but tier 1 carriers are not – we’re talking thousands of employees, and where responsibility for revenue assurance spans multiple departments and affects multiple systems. The average time for a human-based team to identify fraudulent activity can take many hours, which gives plenty of time for fraudsters to make multiple calls via multiple devices, across multiple customers, and move on before the carrier is even aware fraud has taken place.

Fraud prevention doesn’t need to be a manual process. Implementing a fraud protection solution that automatically kills calls in progress, recognises patterns and adapts will mean that fraud is identified in seconds and actively reduces damages.

  1. Ever-moving goal posts

Methods of fraud are changing. Pickpocketing, where lots of small calls that are hard to identify as fraudulent are made over time, is more common than ever before. Furthermore, there’s an increase in incidents where a combination of technology is used – for example, where a user makes a call in response to a spoofed number sent via email or SMS and the premium-rate nature of the call is masked from their handset.

The methods used don’t even need to be sophisticated. There are many cases where calls are made from a hotel room and the scale of the damage is only revealed when the bill is pulled at the time of check out, which could be well after the agreed carrier clawback periods.

Partnering with a provider that not only has solutions that make use of machine learning to self-learn and adapt, but also that has a deep understanding of how attack vectors are changing, will put service providers in a position of knowledge and confidence.

  1. Wide product portfolios

Carriers generally use a wide variety of technologies to provide comms to companies, however, finding a solution that can adequately protect all of them is a particular challenge. Being able to offer the same assurances to end customers and the channel, regardless of the product taken, is important.

Fraud protection solutions should be able to operate on multiple types of networks and succeed at preventing fraud.

  1. Customer mobility, churn and liability

Customer lock-in via lengthy contracts is much less common than it used to be. This is as a result of the changing dynamics around competitiveness, specifically the relative ease of porting numbers, and the speed and simplicity of deploying cloud-based systems (as opposed to complex on-premise installations) that the industry now enjoys. This means it’s now far easier for customers to move to a different provider: one of the reasons why customer experience is gaining so much importance. Being bitten by fraud is a massively negative customer experience, causing disruption and threatening relationships. But unlike in the traditional PBX world, it’s often the cloud UC service providers that are now in the chair to foot the bill.

Effective fraud prevention is more than detection; solutions should actively kill fraud within seconds to reduce the risk of customer disruption and churn.

  1. Visibility and collaboration within the channel

Carriers selling through channel partners often don’t actually own the end customer, or often even know who the end customer is. This makes it particularly difficult to manage and prevent fraud on behalf of resellers and their customers. In most cases, service providers rely on the customers’ resellers to input sensible credit limits (if they even have a facility for this at all) which means that they put their revenue assurance in their partners’ hands.

Implementing a fraud protection solution that incorporates agreed credit limits as well as provides visibility of alerts and results to both resellers and their customers creates shared responsibility and collaboration that is underpinned by real data and intelligence.

  1. Ineffective blacklisting

Another element within the fraud landscape is IP blacklisting. This was never really that effective and when IPv6 comes into full force then not only will existing lists become meaningless, but with the availability of billions more IPs it’ll be even easier for fraudsters to use new IP ranges and avoid being blacklisted.

Fast-moving fraudsters from multiple IP ranges will only be effectively stopped by automated systems that are able to detect them within seconds.

  1. Internet of Things

IoT is another dynamic, simply because as more devices connect to a network there are potentially more ways to get into that network. This provides hackers with more avenues to exploit and greater opportunity, whilst forcing service providers to rely on their partners and end users to maintain good practice in security.

Service providers have a lot to manage when it comes to fraud protection, and with so many dynamics outside of their control, it is important for them to take steps to monitor and manage the traffic they carry. Tollring’s award-winning anti-fraud product, iCS Protect, provides a comprehensive solution in the fight against fraud to deliver peace of mind, increased profitability and reduced churn to tier 1 service providers across the globe.


As published by UC Today.