Making a difference when it comes to fraud prevention

Where Communication Professionals Go to Know

COVID-19 Fraud Threat – How can we stay protected?

by | Oct 22, 2021 | News | 0 comments

Written by ABHandshake

Throughout the COVID-19 pandemic, businesses have become more reliant on telecommunications services as their teams operate remotely.

Call center call volume is rising and staff sizes are shrinking. Consumers are living with new fears and less financial confidence. Such an environment presents multiple opportunities for fraudsters and these days, they’re taking advantage of them.

Recently, Global Leaders Forum (GLF) and Delta Partners Group found that leading operators have seen the volume of fraud attacks on certain traffic flows, such as international voice, noticeably increasing in volume amid the new normal.

They also found that as traffic volumes increased in years preceding the pandemic, the volume of telecom fraud attacks also rose, in general.

So, it’s clear that the general rule of thumb here is this – the higher the traffic, the higher the fraud.

And COVID-19 has exacerbated this effect.

At the same time, it’s important to consider the impact that economic hardship has on crime, in general. As citizens around the world lose their jobs or their income drops for various reasons connected to the lockdown measures, some people may be turning to crime. This could be another reason for increased volumes of fraud attacks amid the pandemic, in the telecom industry.

In this article, we’ll focus on how fraud tactics have evolved amid the pandemic and the impact they’ve had on operators around the world.

Let’s look at this in detail.

Fraud Is Rising Each Year, Despite COVID

Fraudsters are evolving, developing more sophisticated schemes and learning how to take more with each individual attack. The circumstances brought on by the COVID-19 pandemic have only amplified these losses.

Consider the following stats from 2019:

Telecom fraud losses were already enormous before the onset of the COVID-19 pandemic.

Based on these figures, we can estimate how much was lost in 2020, amid the pandemic.

The Effects of COVID-19 on Telecom Fraud

Based on the above figures, we can estimate that 1.86% of global telecom revenues may have been stolen by fraudsters in 2020.

The telecommunications industry generated an estimated $1.5 trillion in total revenue in 2020. 1.86% of $1.5 trillion amounts to $27.9 billion in potential revenue losses in 2020. The CFCA fraud loss survey released later this year will provide us with an exact figure.

Let’s look at what this means for individual providers. Here’s how much they may have lost to fraud in 2020:

AT&T: $3.1 billion in potential losses ($171.8 billion annual revenue).

Telefonica Group: $915 million in potential losses ($49.2 billion annual revenue)

Vodafone Group: $930 million in potential losses ($50.0 billion annual revenue).

These numbers are staggering.

Let’s look in detail at how telecom fraud has evolved throughout COVID-19 to cause such losses.

Telecom Fraud Schemes are Evolving Amid COVID-19

As reported by Total Telecom, operators around the world have experienced significant changes in telecom fraud volumes and tactics amid the pandemic:

  • 75% of telco operators have experienced new cases of fraud.
  • 61% have seen an increase or a significant increase in network security threats since the start of COVID.
  • 47% have experienced increasing or significantly increasing fraud events.
  • 55% plan to adopt new approaches to their customer interactions.

Let’s look at the tactics fraudsters are using today, in detail.

Fraud Tactics of COVID-19

According to the GSMA’s Fraud And Security Group (GSMA FASG), criminals have established new COVID-themed attacks that target consumers and employees working from home amid the lockdown.

Fraudsters have also evolved common schemes and adapted new ones to manipulate financial, commercial and official government campaigns amid COVID-19 using both message and voice channels.

For example, as call volumes have risen, the number of PBX (Private Branch Exchange) hacks has increased.

Here are some more examples of how criminals have adapted their schemes to the new normal:

Voice Phishing (Vishing) and Phone-based Scams

The volume of voice phishing attacks has increased around the world as people spend more time at home. GSMA FASG expects the volume of such attacks to continue rising as lockdowns remain to some extent and people remain working from home.

In China, specifically, rising fraud incidents during lockdown included:

  • Impersonating public officials or staff from pharma research companies.
  • Selling counterfeit medicines.
  • Impersonating charity staff (i.e. Red Cross) to solicit donations.
  • Falsely claiming that a loved one has been infected or isolated and soliciting money for hospital fees or other financial assistance.

Such attacks generally target consumers. While these aren’t telecommunications fraud, per se, they clearly illustrate the new normal.

Robocalls

Several operators around the world have observed new Robocall strategies that have adapted to the new normal. The volume of robocalls claiming to sell tests, protective equipment, loans, job opportunities and more has risen significantly.

Operators must promptly identify originating numbers and block them before these robocalls can inflict damage. However, this is harder than it seems.

One of the biggest challenges operators face with current anti-fraud technology is accurately detecting fraudulent robocalls 100% of the time. Remember, some robocalls are legitimate and customers are expecting them.

In many cases, governments are using automated calls to deliver important COVID-19 messages to constituents.

If we block these, we can do even greater damage.

In some cases, these legitimate calls have been blocked. As a result, operators are generating call registries to minimize incorrect identification of legitimate robocalls.

However, this is an inefficient approach that can’t deliver 100% accurate results. A significant amount of scam calls continue to reach customers.

Observations of Mobile Fraud

While employees work from home and governments implement travel and retail restrictions, operators have observed that the volume of some fraud attacks has substantially fallen, such as:

  • Subscription fraud
  • Roaming fraud
  • SIM swap
  • Handset subsidy fraud

However, operators have experienced a rise in the volume of other fraud schemes:

  • PBX fraud
  • Arbitrage

The GSMA FASG hasn’t definitively confirmed changes in the volume and approach of other fraud attacks like International Revenue Share Fraud (IRSF) and SIM box fraud.

However, fraudsters are using PBX fraud to carry out IRSF at a marginally increased rate. This is largely due to a lack of people on physical premises.

Companies are also now extending their VoIP network beyond their local networks and connecting remote workers via SIP (Session Initiation Protocol) clients to their corporate PBX.

When a company swiftly implements new infrastructure like this, there is a chance for misconfiguration, a lack of adequate testing and many crucial security measures are overlooked. As a result, several communication avenues are vulnerable to fraud attacks.

In terms of arbitrage, fraudsters have taken greater advantage of rises in mobile network operator data allowances and tariff changes.

Operators around the globe have also experienced increases in roaming data charging bypass.

Traffic Pattern Changes and Threat Detection

Operators have also experienced changes in usage patterns and volumes on fixed-line and mobile communication lines. While there has been an increase in voice and data usage, domestic usage patterns are now becoming more active throughout the day, rather than the evening.

Usual business traffic has decreased due to employees now working remotely.

Typical call length patterns are changing as well.

All of this has resulted in another problem. Machine-learning fraud management systems use pattern recognition to detect fraud. These new patterns have rendered these systems less reliable. They now have to be ‘re-trained’ to reach pre-pandemic efficacy levels.

How Can We Stay Protected

Fraud is changing shape amid COVID and has left operators shaken. The new environment in which they’re operating has left them vulnerable and new fraud tactics have caught them off guard. Criminals’ tactics remain resilient and adaptable and the volume of attacks is rising.

The question operators are asking is, ‘How can we stay protected?’

Fortunately, the telecom industry now has the tools to stop fraud completely, regardless of the extra pressure a pandemic or other unexpected tragedy puts on the industry.

Using the simple concept of cross-validation of call details in real-time, we can detect all forms of fraud 100% of the time with zero false positives and block all fraudulent calls before they are connected.

Cross Validation

We are amid an unexpected rise in fraud attacks in a harrowing global pandemic. But, for the first time in the history of telecommunications, operators can now use cross-validation to not only minimize fraud, but stop all telecom fraud in its tracks, once and for all.

While this sounds too good to be true, it’s actually a realistic vision, based on very simple and reliable technology.

The one key factor in each fraud scheme mentioned above is their manipulation to the call details in the registry.

Any time a fraudster infiltrates a call chain, a discrepancy emerges between the call details in the originating and terminating registries. Successfully stopping telecom fraud depends entirely on our ability to detect such manipulations in these call details and cross-validating them in real-time before a call is connected.

This approach ensures no false positives and gives operators the chance to detect and stop fraudulent calls in real-time.

Here’s how it works:

  1. When a call is initiated, the originating operator sends a validation request for call details to the terminating network.
  2. The validation request reaches the terminating network before the actual call does.
  3. The call details from the originating call registry are cross-validated with the call details from the terminating registry to detect any signs of manipulation.

Any manipulation in the call details can mean only one thing – fraud. When manipulation is detected, the operator can block the call before it’s connected.

All traffic between members of the community using this ‘handshake’ is free from fraud, regardless of whether we are amid a global pandemic or not.

A Global Fraud-Free Community

As more operators around the world join the community, the network of cross-validated traffic grows, leaving the fraudsters with nowhere to go.

This technology can be easily integrated into the default settings of an operator’s existing network and is affordable for any operator in any country around the world.

With cross-validation technology, we can completely eliminate telecommunications fraud around the globe, once and for all.

0 Comments

Submit a Comment

w

Contact Us

If you are interested in knowing more about membership, are a possible strategic partner wishing to collaborate, are looking at possible sponsorship opportunities or wanting to attend one of our events.  Please use a legitimate business email address when enquiring. Thank you.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.