Theft of Service is a Persistent, Widespread and Hard to Solve Issue

By Gary Kim October 21, 2014

Theft of service is a persistent and frustratingly widespread occurrence in the communication industry, representing perhaps two percent of industry revenues, but difficult to prevent because the attacks happen in so many ways, over a broad range of products.

Recent CFCA surveys continue to suggest a range of reasons why fraud prevention efforts are troublesome, in many cases.

Respondents to CFCA surveys say resources are an issue. There simply are not enough people within each organization to focus on fraud issues.

Others argue the investment in network technology and people to deal with the problems might exceed the amount lost to fraud.

Some respondents also argue that the losses are not big enough to be treated as anything other than unavoidable business costs, as the retail sector deals with shoplifting.

According to the Communications Fraud Control Association, theft of international calling and other communications services resources in 2013 represented a loss of US$46.3 billion, up 15 percent from 2011 levels.

The problem arguably has gotten more complex, as the range of products sold by the communications industry has grown, including Internet access, video entertainment, e-commerce, content and machine-to-machine services, for example.

Consider estimated losses, which are fragmented. The top five methods for committing fraud in 2013 included $5.22 billion in subscription fraud; $4.42 billion caused by PBX hacking; $3.62 billion in account takeover/ID theft; $3.62 billion lost to VoIP hacking and $3.35 billion in dealer fraud.  

The top five types of fraud reported by operators included $6.11 billion in roaming fraud; $5.32 billion caused by wholesale fraud; $4.73 billion in losses from premium rate service; $3.55 billion in losses of cable or satellite TV services and $2.96 billion lost because of hardware reselling.

As those lists suggest, there are many products subject to theft, and multiple ways of attacking the services, which might suggest the complexity of the problems.

The main reason for the increase in fraud is due to more attacks targeting the mobile industry, CFCA says. Service providers with one million to 10 million subscribers reported more fraud incidents than any other group.

The top five countries where fraud terminates are: Latvia, Gambia, Somalia, Sierra Leone, and Guinea. A disproportionate amount of fraud traffic seems to originate in North America or Western Europe.

Is the international wholesale part of the voice ecosystem the place to look for solutions? Some think so.

Many types of fraud, including false answering supervision, international revenue share fraud (IRSF), PBX hacking and bypass fraud, are specific to the wholesale environment, according to Belgacom. 

Edited by Maurice Nagle

Contributing Editor

Related Articles

The World is His Oyster: Connected Solutions Enable Daniel Ward to See Food

By: Paula Bernier    3/16/2018

Fresh seafood can taste great, but if it is not handled properly, people can get sick, and that can lead to business closures and lost revenues. That'…

Read More

How to Get Ready for GDPR if You've Waited Until the Last Minute

By: Special Guest    3/14/2018

With less than two months until the General Data Protection Regulations (GDPR) deadline, many companies have already started making sure that their bu…

Read More

How Fintech is Helping Create Global Businesses

By: Special Guest    3/14/2018

The growth of Fintech probably has not escaped your attention. Whether you're a customer making contactless payments or an investor weighing up CFD tr…

Read More

Are We Prepared for Automation?

By: Special Guest    3/13/2018

We are barreling toward a future of automation. A great proportion of the six million US manufacturing jobs that have disappeared over the last few de…

Read More

The Dark Web - A Hot Bed for Cybercrime

By: Special Guest    3/12/2018

There is a corner of the internet that is cloaked from every day users. Beneath the typical search engines and web browsers, an illegal marketplace is…

Read More