F R A U D
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New Challenges in an Open
Telecommunications World
Telecommunications fraud is almost as old as the industry and
creates losses in the billions every year. Despite recent organizational
and technological countermeasures the problem is not going away
argues Frank Bunn.
New potential hazards arise as not implemented in recent years operators’ authentication centres
many traditional telecommunication because competition for every verify callers by checking SIM card
networks migrate to IP-based single customer was tough. information when a call is placed. In
infrastructures, new third-party the case of poor security algorithms,
content offerings are integrated Legal users who aren’t disciplined stolen or cloned SIM cards can
using Web 2.0 and Mashup about costs constitute a related be fraudulently used. That’s why
technologies and Web-enabled problem. Mobile operators now the industry is called upon to
smartphones become more wide- offer a wide range of attractive use more powerful algorithms
spread. Operators would be well- communication, content, and and security keys and develop
advised to include these challenges entertainment services driving up more effective authentication.
in their fraud management strategy. usage but frequently users are
unable to pay the bills. While this Roaming fraud is one of the
Fraud comes in many shapes and may not be malicious fraud, the most serious problems for telcos
sizes resulting in as many defensive ultimate outcome for providers is because operators lose sales
and preventative approaches. In the same: they are stuck with the revenue but must also pay each
general, fraud can be classified cost of the services rendered or other’s charges. Stolen and cloned
into three categories: subscription; will have to sue their customers SIM cards are mainly used for
technical and internal fraud. to recover the charges. international calls placed abroad.
The roaming data generated during
Subscription Fraud Technical Fraud these calls is exchanged between
providers, which may take up to
Faking their identities, end users Technical fraud involves individuals 36 hours. It is only after this period
enter into contracts intentionally manipulating telecoms infrastructure, that home operators are able to
failing to pay for services used. mobile devices or circumventing spot possible fraudulent use.
Certainly, more effective credit control mechanisms. SIM card
checks are required but were cloning is a notorious. Cellular phone Almost all well-known mobile
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