Fraud costs operators $43b

Michael Carroll
23 May 2011
00:00

International revenue share fraud cost the global telecoms industry a staggering €30 billion ($42.6 billion) in 2010, the head of Portuguese operator Optimus’ fraud prevention division claims.

Fraud director Jose Sobreira said fraudsters racked up the sum by generating high volumes of calls to premium rate numbers or countries with high termination rates, and predicted the problem could soar as operators transition to all-IP networks.

“The move to full IP will bring a new set of fraud and security issues,” Sobreira told delegates at the annual WeDo Technologies user group. The pending risk makes it all the more important that telco’s fraud management systems are closely integrated with revenue assurance set-ups, and can adapt to rapidly changing attack scenarios, he said.

Sobreira highlighted recent cases in Belgium, Romania and the UK where premium rate fraud cost operators billions in 2010, and noted that fraud management systems must be capable of dealing with global threats.

A premium rate number fraud typically involves web-based resellers of high-value international numbers, Sobreira explained. Fraudsters buy up the numbers and then generate high volumes of calls to the numbers in order to ramp up their share of the revenues created.

Sobreira defines telecom fraud as a “deliberate behavior towards the operator,” designed to access “financial resources and customer information. It is criminal.”

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