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

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