i
c F R A U D M A N A G E M E N T
Y
e
c
The mobile phone industry is
particularly vulnerable to fraud
which is now viewed as a major
risk by everyone including
consumers. The industry must
ensure robust solutions are in place
to combat it believes Mark Bish.
According to KPMG’s annual Fraud Barometer, UK fraud
De G
is at a record high, with losses totalling £1 billion last year.
Unfortunately, the telecoms industry is not immune to this
trend. Almost a quarter of frauds reported by consumers to
Experian's ‘victims of fraud service’ in the first half of 2008
involved opening a telecoms account, up from 11% in 2007.
The Communications Fraud Control Association (CFCA),
the global telecoms industry’s fraud association, reports t
e
that mobile phone companies suffer more than £25 million
in lost revenues annually through fraud. The International
a
t
Data Corporation market research and analysis indicates
as much as 50% of bad debt among European telecoms
companies is a direct result of fraudulent activities.
i
t
Whilst the financial losses the biggest mobile operators
l
i
experience through fraud are at a manageable level,
customers are increasingly voicing concerns about
s
n
payment or handset fraud resulting from poor security.
This is potentially damaging to a company’s brand and
reputation and should cause mobile operators and

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retailers to review existing validation processes.
Ri

Knowing exactly who the customer is at the point of
t
data entry using industry-recognised authentication
solutions dramatically reduces opportunities
for fraud but cannot, on its own, eliminate it
without considering the payment elements.
g
h
Verifying Customers’ Identities
h
e
Mobile phone operators and retailers face the challenge
of conducting thorough data validation at the point of
sign-up. Identities must be checked without negatively
t
impacting the important customer experience as buying
a mobile phone or entering into a new contract is often
an impulsive decision. It is therefore vital to telecoms
operators that customers are not distracted or change
their mind at point-of-sale before signing the contract.
While consumers generally understand the need to prove
their identity and accept it is in their best interests, most
are frustrated by having to repeat the same information

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