Fraud Domain

November 2016
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Objective
• Introduction to Telecommunications Fraud
• Categories of Telecommunications Fraud

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Introduction to Telecommunication Fraud – Fraud Definition

• What is Telecommunication Fraud ?

• Theft of telecommunication services (telephones, cell phones)
• Use of telecommunication service to commit Frauds
• Usage of services intention of avoiding payment
• without correct payment
• with no payment at all
• someone else pays

• Victims ?
• Consumers
• Businesses
• Communication service providers

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Introduction to Telecommunication Fraud – Fraud Triangle

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Introduction to Telecommunication Fraud - Cost of Fraud to the Industry

• $30 Billion per annum?

• $50 Billion per annum?
• Estimates vary but probably stable around this figure worldwide for the past 5
• years
• A value of up to 6% of total company revenue is not unusual
• Control to less than 1% of total revenue is regarded as a good performance

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Introduction to Telecommunication Fraud

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Introduction to Telecommunication Fraud

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Introduction to Telecommunication Fraud

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Introduction to Telecommunication Fraud

• Frauds in In-Network v/s Roaming

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Categories of Telecom Fraud
• Traffic Pumping Schemes – These schemes use “access stimulation”
techniques to boost traffic to a high cost destination, which then shares the
revenue with the fraudster.
• Schemes to Defraud Telecom Service Providers – These schemes are the
most complicated, and exploit telecom service providers using SIP trunking,
regulatory loopholes, and more.
• Schemes Conducted Over the Telephone – Also known as “Phone Fraud,” this
category covers all types of general fraud that are perpetrated over the
telephone
• Schemes to Defraud Subscribers - This is simply any scheme that involves
gaining access to someone else’s account to make free phone calls.

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Categories of Telecom Fraud- Traffic Pumping Schemes

• Call Forwarding Fraud

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Categories of Telecom Fraud- Traffic Pumping Schemes
• One Ring and Cut (Wangiri) Fraud

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Categories of Telecom Fraud- Traffic Pumping Schemes
• SMS Spamming
• Bulk SMS to Subscribers
• unsolicited commercial advertisements

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Categories of Telecom Fraud- Schemes to Defraud Telecom Service
Providers
• IRSF Fraud

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Categories of Telecom Fraud- Schemes to Defraud Telecom Service
Providers
• Bypass Fraud

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Categories of Telecom Fraud- Schemes to Defraud Telecom Service
Providers
• Bypass Fraud

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Categories of Telecom Fraud- Schemes to Defraud Telecom Service
Providers
• False Answer Supervision Telecom Fraud

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Categories of Telecom Fraud- Schemes to Defraud Subscribers
• Subscription Fraud
• Distinction between “Cannot pay” and “No intention to pay”
• Probably the most widespread fraud type globally
• Also extends into the Mobile market place
• Multiple fraudulent applications for service
• Handsets sold - possibly abroad
• if bought in a country where heavily discounted and sold in a country where full price is levied....arbitrage
• SIM cards shipped abroad and heavily used
• maybe part of call selling scam

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Categories of Telecom Fraud- Schemes to Defraud Subscribers
• Subscription Fraud

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Categories of Telecom Fraud- Schemes to Defraud Subscribers
• SIM Cloning Fraud

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Categories of Telecom Fraud- Schemes Conducted Over the Telephone
• Account Takeover

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Categories of Telecom Fraud
• Roaming Fraud
• Types of Roaming:
• Inbound
• Outbound

• Abusing roaming facilities

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Categories of Telecom Fraud
• PRS Fraud

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Categories of Telecom Fraud
• Dealer Fraud
• Many operators employ resellers to help extend their reach. Unfortunately, unsavory
resellers can sometimes directly exploit these agreements. For example, some dealers
may simply falsify sales records to claim grossly inflated sales commissions. Other
examples include reporting sold SIMs as lost, reselling expired vouchers, and relaxing
subscription requirements to increase the volume of sales and thereby obtain
fraudulent commissions. These types of fraud can leave a trail of unpaid bills and
unaccounted-for usage

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Categories of Telecom Fraud
• Internal Fraud
• Internal fraud represents 8.2% of incidences but generates 40.3% of value lost which is
equal invalue of the following four types of fraud combined: roaming (11.4%), pre-paid
(10.8%),subscription (11.6%) and premium (13.2%)
• unauthorized credits and amendments;
• facilitating external fraud
• misuse of customer accounts
• inflation of commission
• data theft

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Categories of Telecom Fraud
• PBX Fraud

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Summary
• Introduced to Telecommunications Fraud
• Covered Categories of Telecom Fraud

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