Telecom fraud for many operators is on the rise, as network traffic patterns continue to spike due to external factors impacting voice and data, and demand in online use. In particular, the industry is experiencing a rise in criminal based fraud like ‘Vishing’, that uses social engineering as means to gaining access to personal information.
In recent times it’s impossible to avoid media channels, be mainstream media or online, that don’t cover a story on cyber attacks on various institutions or global businesses. In terms of media coverage, cyber attacks are mainly associated with an attack on business IT systems, online sites or consumer devices. However, what isn’t covered in great detail is the continuing rise of fraud through means of attack on core networks in the telecom sector.
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In terms of figures, organizations like the Communications Fraud Control Association (CFCA) have estimated total global telecom revenues to be in the $1.8 Trillion USD region in 2021, with telecom revenue loss due to fraud to be estimated at 2.22%, resulting in $39.89 Billion USD in loss. With this in mind telecom fraud is a major issue for telecom operators.
However, there is a paradox for telcos. On one side telco’s have been benefiting from the rise in voice and data traffic, but the downside of this is that it has almost increased telecom fraud on the network in a similar fashion. In addition, the big increase in telecom fraud can also be attributable to gaps and vulnerabilities in voice and data services delivered in the pandemic, with operators implementing changes in services and checks.
Threats come from many areas on the network
The types of telecom fraud at the network level varies, with a number of fraud types that are emerging. Telecom fraud can also be defined as a process or activity illegally taking advantage of the network using deception through fraudulent means. Fraud types include but are not limited to International Revenue Sharing Fraud (IRSF) where fraud is committed on voice and SMS, Interconnect Bypass, PBX Hacking, Traffic Pumping, Deposit Fraud, Smishing/SMS Phishing, SIM Jacking/Swapping, and Account Takeover to name a few.
However, from the number of types of fraud that exist, recently there has been a particular increase in IRSF, with operators losing between $4-$7 billion USD. In this type of fraud criminals unrealistically inflate traffic to international premium rate numbers (IPRN). Secondly, Interconnect Bypass Fraud (SIM box fraud) has also been on the rise and highly damaging to operator revenues, where attackers use a variety of least cost call termination techniques to divert international calls to avoid termination costs. The third fraud type that also is making headway is Subscription Fraud, where fraudsters utilize fake identification on contracts.
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By GlobalDataLastly, GlobalData’s discussions with telecom operators has highlighted the emergence of ‘Vishing’ attacks on services, where scammers with fake profiles contact genuine users over the phone with a view of persuading them to release personal information.
Telecom operators remain focused on addressing fraud
The sheer loss in revenue that operators are experiencing has made them become proactive, and invest time, resources and money into tackling telecom fraud. But it’s still very much a cat and mouse game. Also, the sheer volume of fraud committed and the complexity in nature really requires governing regulators to take a more active role. As one operator put it to GlobalData – “we can only do some much, and to really address vishing the regulator needs to drive a consortium of different players in the value chain, and in government making funding available”.
