Fraud Management for Telecom Industry

Trends & Challenges

Telecom fraud, perhaps the ultimate in virtual crime, is alive, well, and on the increase.

According to the Communications Fraud Control Association, Fraud costs the telecommunications industry $35-$40 billion annually, But it doesn’t have to eat at your bottom line. Fraud Analytics for Telecom detects fraud to help you minimize losses and write-offs. It detects technical fraud, including calling card fraud, cloning, clip-on fraud, PBX fraud and many more types.

In the general talk of sales, costs and profits in the telecom industry lies a soft underbelly: 'revenue leakage'. It may seem a strange term in itself. How after all can money simply leak away in network operations? How indeed? Of the many kinds of leakage, one stands out - a rather shady testimony to the inventiveness of a number of people around the world. Telecom fraud, perhaps the ultimate in virtual white-collar crime, is alive, well, and on the increase. But as a virtual crime, even its true extent remains unknown.

A leading Fraud and Security industry association, estimates a figure for global telecommunications fraud of $60 billion per year, and believes that operators lose as much as 6% of their annual revenue to fraud, and that figure is set to rise with the growing use of next-generation wireless and IP services. This activity is astonishing and the money involved is a huge chunk of the revenue the industry accrues. And the figure probably does not include the insider business frauds such as procurement and invoicing crime.

Next-generation telecom technologies promise to bring a whole new set of services to business and consumer users, but they also threaten to lead to unprecedented levels of fraud. Drive-by hacking into wireless local area networks, leading to deeper infiltration into company intranets, and the speedy transfer of fraudulently acquired information across GPRS networks are just two of the fresh problems facing corporate, service providers and the organizations charged with combating fraud.

What is Telecom Fraud?

Telecom Fraud can be defined as the procurement or use of a telecommunications product or service with intent to avoid payment with respect to that product or service. Telecom Fraud is a global problem that can no longer be ignored if a company wants to maintain a healthy market standing in the current climate.

Traditional types of fraud still exist and the majority of operators have shown themselves to be ineffectual in curbing them. The development of next generation networks offers huge potential for revenue generation but the amount of risk operators will expose themselves to will also increase dramatically. The more complex networks, services and processes become, the more opportunity fraudsters have to exploit loopholes and steal vitally needed revenue.

Around the world telecom companies have realized the impact of fraud loss and are positioned at various stages of the revenue assurance pyramid. Some have implemented ad hoc processes, some have turned to automated solutions to help prevent the malaise, while a few are looking at fraud management as a part of an integrated revenue assurance challenge. But at whatever stage the operator might be in managing fraud, the world telecom scenario has traversed onto the next generation of networks and services. From mere hype to stark reality, the march towards the future is on!

Telecommunication companies have now merged their business and are migrating from the “static” circuit switched environment to the “dynamic” new businesses in the IP world. As market pressures force the operators one-by-one to join the next generation services bandwagon, the fraudster awaits to hitch not only a free ride but also scrape out profits from the operators novel revenue channels. The very purpose of moving to the new platform of network and services will be sabotaged unless operators realize the proactive need to take precautionary measures, having learnt from bitter experience in the circuit switched domain. The issue of credibility in the market and amongst customers also looms in front of fraud susceptible operators as companies subjected to many frauds and intrusions are not likely to be popular among customers thus losing even more revenue.

Below mentioned are some of the Next Generation Frauds –

Next Gen Handset Frauds

MMS Frauds
Content Reselling
Illegal Redistribution of Services
Viruses and Trojans
Malicious Unwanted Content
Cloning
QoS (Quality of Service) Manipulation
DoS attacks
Roaming

M-commerce Vulnerabilities

Fraudulent Advertisers
Micro payment (content providers)
Macro payment (content provider)
Subscription
Bad debts

Our Solution

SEEinfobiz's Fraud Management System (FMS) is a market leader in fraud detection and analysis. We at SEEinfobiz Pvt Ltd look at the problems that service providers and corporatist face, with regard to next generation telecom frauds.

SEEinfobiz's FMS detects fraud by reading and analyzing the same streams of call detail records used for billing. As part of its detection function, FMS builds usage profiles and tracks current usage at the customer or service level. Services with multiple numbers have the option to track at the individual number level. FMS detects anomalies within the data and automatically generates alarms that are analyzed by the system to identify potentially fraudulent behavior. The information is then presented to a fraud analyst/case manager using a graphical user interface (GUI).

The three primary functional features of FMS include –

Detection
Analysis
User interface

Detect fraud instantly and act to prevent losses when registering new customers, during transactions and while serving existing accounts. SEEinfobiz's Fraud Management System solutions provide telecom carriers—with comprehensive protection while reducing costs and impact on legitimate customers.

Using an easy-to-use case manager with reason codes, Fraud Analyticst then prioritizes the accounts in queues according to fraud scores that reflect your fraud policies.

Using neural networks and patented technology, FMS for Telecom aggregates subscriber data for each account. It analyzes multiple data sources to quickly and accurately detect fraud, including messages, call-in-progress information, billing statements, payment history, service features, rate plan information, call detail records, IP detail records, etc.

FMS leverages a robust data consortium of subscriber data contributed by telecom service providers to build predictive models that are adept at identifying emerging fraud trends. Fraud Analytics also integrates with Risk Analytics for Telecom to provide a complete solution for bad debt, subscription fraud and technical fraud.

Each component plays a critical role in detecting, analyzing and responding to fraudulent activity. FMS can be customized to the individual carriers’ unique business and operator policies through parameters. The parameters are used to determine the behavior of the system’s case management and decision support features in instances of suspected fraud, as well as prioritizing fraud and making recommendations for counteractions.

SEEinfobiz's FMS is tightly integrated within a carrier’s operations environment and directly interacts with numerous other systems, including a mediation or call collection system that collects call data, a billing, or a source for subscriber information such as a customer care system. FMS is also capable of accepting alarm information from other systems

SEEinfobiz's FMS is delivered with the most common detection and analysis features. Additional functionality, not used by all operators, can be selectively enabled for each installation. In addition, functionality that is unique to a specific operator can be implemented via custom modules defined by the customer and developed by SEEinfobiz. This approach allows operators to purchase a solution that meets their business and fraud needs without having to pay for enhanced or custom functionality that they don’t require.

The FMS provides a GUI for each person using the fraud system. This includes the fraud analyst/case manager, which is responsible for establishing the operator specific knowledge, parameters and otherwise ensuring the system is implementing the policies of the operator. Case management and resolution tools are also provided to ensure prompt and efficient response to fraud.

A single FMS can be used to perform fraud management for both fixed line and wireless networks allowing carriers to have a single view of the customer, regardless of the mix of services being provided.

Benefits:

SEEinfobiz's Fraud Management System provides revenue assurance by protecting against losses due to fraud, and by identifying previously uncollected revenue sources

It controls operating expenses through securely and reliably scaling, with subscriber base and call volumes

SEEinfobiz's Fraud Management System enhances brand image of carrier by protecting subscribers from erroneous bills

It features the plug-in architecture, a ”manager of managers” approach, which provides the ability to integrate a variety of technologies and adapt to new ones quickly, minimizing payback periods

SEEinfobiz's Fraud Management System provides a complete solution supplemented by experienced fraud consultants offering services to help operators define or augment a total fraud management strategy, assist in building fraud management departments, and maximize the benefits of using SEEinfobiz's FMS system

With SEEinfobiz's FMS, all incoming claims receive the same high level of scrutiny. The process is unaffected by heavy caseloads, employee turnover or differences in adjuster experience and skill
It prevents fraudulent applications from entering your decision workflow, consuming your resources and affecting your bottom line