Guest Post: Telecom Frauds and Revenue Leakage
Guest post by Roger Collings
Despite advancements in technology, telecom frauds continue to be a major source of revenue leakage for businesses and telecom operators alike. It’s believed that businesses worldwide face a loss of 3 – 9% in annual revenues through telecom frauds. According to statistics published by the Communications Fraud Control Association (CFCA), telecom fraud costs businesses more than $40 billion each year.
How do various types of telecom frauds lead to revenue losses and leakages? Let’s take a closer look.
As the name suggests, these frauds are typically committed outside the network. Fraudsters and hackers can penetrate a telecom network to make unsolicited calls, remotely open/shut specific ports on telephony servers and even flood a business network with spurious calls. Fraudsters can use the network to make calls to premium numbers and use a business’s telephony infrastructure outside business hours and on holidays for personal monetary gains. External frauds are typically driven by a fraudster’s malicious intentions and greed and can be monetarily damaging for any business.
Such telecom frauds are usually initiated by insiders. Internal frauds typically include making unapproved configuration changes in any of the network elements, modifying the tariff configuration without an approval, and extracting/ manipulating information on MSC-IN-mediation-billing systems. Since such frauds often impact the billing, it’s crucial for a business to prevent them to minimize revenue leakages.
Telecom frauds aren’t just limited to the network. Fraudsters often use fake subscriptions, caller IDs and unapproved forwarding to conduct telecom frauds. Such non-technical frauds are a menace for businesses as well as a major inconvenience for their customers. Since the fraudster’s objective is to cash in on loopholes in the subscription or the call forwarding process, these can often lead to charging discrepancies, thereby causing significant revenue leakage.
So, how do these telecom frauds cause revenue leakages?
- Direct monetary loss through fraudulent calls (internal and external)
- Poor resource utilization due to un-needed circuits
- Loss of customer confidence due to disruption in services
- Financial losses due to litigation and failure to meet contractual obligations
In response to these high cost fraud cases characterized by high volumes of preventable fraudulent calls, Humbug has launched the new Humbug Pro Protection service which will allow the end-user to configure their PBX to block calls to fraudulent destinations based on the following opt-in parameters:
- Community Black List: Over 70,000 certified fraudulent numbers.
- Premium Numbers Worldwide (in the USA these would include 1-900 numbers, for example).
- Specific Countries, Continents, Geographic Areas and Satellite and Mobile Phones.
- Specific numbers or ranges.
- By Business hours – the company configures its normal working hours and Humbug Pro Protect will block calls outside of those hours. .
- By Holiday – allows the company to configure which holidays (single day or range of days) they are closed (by calendar date).
Roger Collings, Managing Director of RDC Communications Ltd in the UK and a telecoms consultant specialising in business VoIP