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Eliminating Fraud, Recovering From Financial Loss and So Much More

by | May 23, 2022 | News | 0 comments

By ABHandshake

Imagine a world free from telecommunications fraud – global loss to telecom fraud in 2019 amounted to $28.3 billion. By eliminating this threat we can prevent billions of dollars in lost revenue to legitimate businesses all around the world. However, the benefits of eliminating telecom fraud don’t end here. 

While telecom fraud has been accepted as an inevitable, unfortunate, aspect of operating in the telecommunications industry – something like a tax –  call validation technology is changing this. 

Call validation technology makes it possible to eliminate telecom fraud on a global level, for good. An interesting question is, what really can we expect from a world free from telecom fraud – besides better revenue retention? 

It turns out, the list of benefits is enormous and even affects areas of operations that are often overlooked when assessing fraud losses. 

In a world free from telecommunications fraud, current tools and processes telcos and enterprises utilize daily can suddenly strengthen, streamline and boost operations in many ways that weren’t previously available. 

We can reduce revenue losses, but we can also eliminate customer churn. We can make troubleshooting and dispute resolution quicker and more accurate. Traceback requests become streamlined and much more. 

By eliminating telecom fraud, a wealth of additional benefits suddenly become attainable that are as invaluable to a company’s operations as raising the bottom line. 

With call validation technology, this grand vision can now become a reality. But to understand the scope of this transformation, we first need to understand how fraud prevents businesses and telcos from making such strides.  

True Impact of Fraud on the Telecom Industry

By eliminating fraud, the standard tools and processes that telcos and enterprises use daily take on a new life. Ordinary processes can help strengthen customer relations, boost brand loyalty, streamline traceback requests and much more.

But, how exactly do traditional fraud schemes prevent this from happening?

Here is a brief list of the fraud threats that telcos and enterprises face daily:

  • Robocalls: A computerized auto-dialer calls subscribers and delivers pre-recorded messages, often to sell an illegitimate product or service or steal sensitive information from the subscriber.
  • Wangiri: A scammer makes a zero-duration call usually to a mobile device to lure the subscriber into calling back to a high-rate number and rack up charges.
  • CLI Spoofing: A fraudster disguises a call by changing the caller ID information displayed to the recipient of a call.
  • Short Stopping: A corrupt operator hijacks a call on their network before it reaches its intended destination and reroutes it to a high-rate destination.
  • Call Stretching: Recording a piece of a conversation in a call before ending the call on the B-side while keeping the A-side on hold with the audio recording playing back repeatedly.
  • Interconnect Bypass: Fraudsters disguise and reroute high-rate traffic to exploit the difference between the high and low interconnect rates for off-network and on-network calls.
  • PBX Hacking: When a criminal gains access to a business’ PBX system and generates a profit by placing international calls at the business’s expense.
  • Wangiri 2.0: Fraudsters initiate callbacks from enterprises to high-rate numbers by submitting high-rate numbers to a company’s online contact form.

While each of these fraud schemes undermine the revenues of legitimate businesses and steal from subscribers, they also prevent other seemingly unrelated processes from truly serving enterprises and subscribers in various ways. 

Dispute resolution, traceback requests, service quality, marketing campaigns, lead generation and many other processes may often be overlooked when we assess damages caused by telecom fraud. However, these processes are integral to telco and enterprise operations and are deeply impeded by fraud.  

Let’s look at the case of Wangiri/Callback Fraud and how it impacts companies beyond revenue loss. 

Case Study #1: Wangiri/Callback fraud

Wangiri fraud can affect both enterprises and subscribers. The ultimate goal of this scheme is to earn a profit by triggering callbacks from subscribers or enterprises to high rate numbers. Depending on who the fraudsters target, the business or the subscriber faces financial loss. 

In traditional Callback Fraud, a subscriber receives a missed call to their cell phone or landline. Out of curiosity, they call back. Regardless of who or what they reach at the other end, even if they only connect for seconds, they are unknowingly charged for a high-rate call. 

While the customer is the target, carriers are also deeply impacted, in a less obvious way. Customers begin filing complaints about incomprehensible phone bills and the carrier’s brand reputation begins to deteriorate.

Loss of Customer Loyalty Due to Wangiri Fraud

At the end of the month, the customer is shocked by an enormous charge on their phone bill and often files a dispute with their carrier. This is the initial cost to the subscriber. However, if it becomes a rampant problem, thousands of subscribers start filing complaints and major problem emerges for the carrier.

Without a traditional fraud management solution, the carriers lack the necessary means to accurately identify the source of the fraud and adequately resolve the disputes. They face a dilemma – either foot the bill for their customers or risk customer churn. 

In the case of Wangiri 2.0, enterprises are the target. Enterprises end up calling thousands of high-rate numbers submitted to their customer support team via their online contact forms. Thinking they are targeting potential leads, they are duped into wasting immense resources on calls that lead them nowhere.

Another fraud scheme, Short Stopping, brings about similar problems, though it uses an entirely different mechanism.

Case Study #2: Short stopping

Total revenue losses to short-stopping and other forms of International Revenue Share Fraud (IRSF) totaled $4 billion in 2019. But the impact reaches far beyond revenue loss. 

In a short-stopping attack, a fraudulent transit carrier hijacks a call on their network and reroutes it to a high-rate destination before it connects with the intended B number. Operators or subscribers ultimately foot the bill.

After rerouting (“short-stopping”) a call, the criminals use various tactics to keep the caller on the line to generate a charged duration. Callers usually remain connected for several moments before realizing something’s wrong and hanging up. Often, the caller isn’t even aware the fraud has occurred until they get their monthly phone bill. 

Carriers suddenly face thousands of unresolvable dispute tickets, brand loyalty deteriorates, customer churn grows and much more.

Operators try to mitigate Short Stopping attacks (and all other telecom fraud attacks) with traditional fraud management systems. However, they lack the capabilities to accurately detect 100% of these attacks before the calls connect. As a result, many operators take the desperate measure of simply blocking entire numbering plans of high-rate countries altogether. 

Subscribers trying to make legitimate calls to these destinations can’t get through, which ultimately further compounds customer dissatisfaction and churn.

At the core of the telecom fraud issue is the traditional approach to fraud mitigation. As I mentioned above, traditional fraud management systems lack the means to accurately detect all fraud attacks and block them before calls connect. 

As long as the fraudsters maintain even a small foothold in this market, the losses remain astounding. The financial and reputational losses threatening telcos and enterprises each year persist on a scale depicted by the above-mentioned figures and continue to grow.  

By taking a new approach to fraud management, telcos needn’t accept the fraud problem as an inevitable part of operating in this industry. AB Handshake’s proposed call validation technology is providing carriers around the world with the ability to eliminate Short Stopping and all other voice fraud on all traffic between operators using the “handshake”. It guarantees 100% accuracy and zero false positives. 

As a result, telcos can enjoy the complete elimination of all of the above-mentioned problems. 

To understand how call validation technology solves the telecom fraud problem, we need to first understand how traditional fraud management systems have failed to do so. 

Problems in Traditional Fraud Management 

Traditional fraud management systems have been primarily designed to work in isolation from those systems used on other operator networks. Each system attempts to fortify the “wall of protection” between its network and the fraudsters targeting their traffic daily.

As a result of such isolation, operators can’t see into the call chain to identify what’s occurring at each interconnect point as a call passes from one carrier to the next across the globe. Such opacity only increases the chances of a fraud attack going undetected.

Additionally, current fraud detection techniques are merely reactive – they detect attacks after-the-fact, allowing the operator to adjust their settings in hopes of preventing similar future attacks.

In response, sophisticated fraudsters simply adopt new strategies while taking advantage of the existing lack of transparency and remain steps ahead of any anti-fraud system trying to stop them.

AB Handshake’s proposed call validation technology drastically changes this picture. 

By establishing a network link between carriers, allowing them to communicate in real-time to cross-validate the call details of any call before it connects, call validation technology can stop all voice fraud with 100% accuracy. 

Here’s how it works. 

Call Validation Technology

Call validation technology is based on the game-changing principle of cross validating call details from the A and B call registries of a call to accurately detect and eliminate fraudulent voice traffic before a call connects.

Here’s how it works:

  1. As soon as an inbound or outbound call is initiated, the originating network records key call details to Call Registry A. The details include the A and B numbers and a time-stamp indicating the start of the call. 
  2. The terminating network then sends its respective call details to Call Registry B. 
  3. Both the A and B registries simultaneously exchange encrypted messaging via an out-of-band channel to cross-validate these call details in real time.

Any discrepancy between the call details can mean only one thing – fraud. 

The system then signals the call as fraudulent, allowing the operator to choose between blocking the call in real-time before it connects or letting it connect (as is sometimes appropriate). 

All live traffic between operators using the handshake is guaranteed to be 100% free from all voice fraud attacks with zero false positives. 

As more members adopt the handshake, the fraud-free community grows. As a result, the volume of impenetrable voice traffic grows while the volume of insecure traffic shrinks, eventually leaving the fraudsters with nowhere to go. 

If adopted on a global scale, call validation technology can eliminate all voice traffic fraud around the world for good. 

Telcos can recover lost revenues, streamline traceback requests, quickly and effectively resolve customer disputes, provide a better customer experience, reduce customer churn, and much more.

The full list of benefits that telcos and enterprises enjoy by eliminating voice fraud on their networks includes the following.

Benefits of Joining the Fraud Free Community

  1. Recover revenue loss

Total telecom fraud loss worldwide in 2019 amounted to $28.3 billion and continues to grow each year. Eliminating telecom fraud prevents the significant revenue losses that telcos and enterprises have been experiencing for decades.

  1. Reduced customer churn 

Subscribers call more actively and develop loyalty to a single carrier or brand when they experience fewer fraud-related problems.

  1. Simplified dispute resolution

The originating and terminating operators are fully aligned on the call details. Such transparency along the transit route and accuracy in the call data simplifies negotiations between transit carriers.

  1. Transparency

The benefits of transparency are multifold. Any inspection into the transit route can be done more efficiently by any party. With easily available data, things like traceback requests from regulators or other authorities are quicker and simpler. 

  1. Confidence 

Zero false positives – only fraudulent calls are blocked. By accurately blocking the right calls, telcos can increase revenues and make their service more attractive and trustworthy. Subscribers and enterprises enjoy a better, safer service that generates confidence and trust.

  1. Eliminate country-specific call blocking 

By accurately blocking only fraudulent calls, carriers can do away with country-wide blockages and provide a better calling experience for their subscribers. Local operators in these regions can recover lost legitimate traffic and related revenues.

  1. Improve SMS revenues

Operators have faced decreasing SMS revenues as flash calls are increasingly used to bypass rising A2P SMS termination rates. By accurately validating every call, operators can easily filter out flash calls to recover lost SMS revenues.

  1. Replace dated, costly solutions

With the reliability of call validation technology, we can do away with out-of-date, ineffective and expensive solutions like test-call generators and provide 24/7 monitoring of operators’ routes by validating live traffic.

  1. More secure services for subscribers

By eliminating voice fraud, calls become a reliable means of providing security measures. For example, voice calls can be used for authentication and verification for various types of services, such as highly sensitive financial services.

More than 200+ operators around the world are already enjoying these benefits plus more, thanks to call validation technology. And this list is growing each day.

This solution is already validating live traffic to every country around the world. 

End Voice Fraud For Good With Call Validation Technology

The telecommunications industry has been approaching fraud mitigation with roughly the same strategy for decades. 

By shifting our approach, from one of isolation to one of cooperation, telcos can bring about an entirely new landscape in which to operate – one in which they can thrive. With fewer disruptions and greater resources, all parties involved in this industry can experience something like a rebirth.

Telcos can cut costs, offer a better service and prevent themselves from falling victim to the actions of fraudulent carriers. 

Enterprises can enjoy more efficient resource allocation and improve the efficiency of marketing campaigns and lead generation. 

Subscribers can enjoy a higher quality, more reliable calling experience void of spam calls, blockages, unexpected charges, identity theft, fear, anxiety and much more. 

The entire industry can take on a more forward-thinking approach to the current and future services they provide. They can build upon their progress without wasting time, energy, and resources on fraud loss.

By taking a fresh approach to fraud mitigation, AB Handshake’s call validation technology makes this grand vision a reality.

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