Telecommunications fraud continues to impact companies globally, with a 12% increase in fraud loss reported in 2023 as compared to 2021 equating to an estimated $38.95 billion lost in 2023 representing 2.5% of telecommunications revenues.
The Communications Fraud Control Association (CFCA) is sharing the results from its worldwide global telecom industry survey, which is conducted to determine the impact of fraud within the industry and to help law enforcement, regulators and the public understand fraud impacts. The most recent survey results were shared by CFCA’s President, Jason Lane-Sellers at the Fall Educational Event hosted by Verizon in Florida.
The survey revealed that top fraud methods included Subscription (Application) Fraud, Subscription (Credit Mule) Fraud, PBX Fraud, Account Takeover, Service/Equipment Abuse accounting for 51% of the fraud issues.
42% of the top ten fraud methods are related to telecommunication account manipulation rather than technological methods, a big shift from 2021 when the top frauds were spoofing, call-back schemes, SMS phishing and pharming, subscription fraud and IP PBX hacking.
Jason Lane-Sellers, CFCA President and Co-Chair of the CFCA Fraud Loss Survey Committee stated:
Subscription fraud has come to the fore and identity fraud being the main drivers. Although subscription fraud has been an eternal issue, the adoption of new technologies to both service provider and fraudster, changes in the customer engagement process and global economic conditions have driven a large surge in particular issues within many markets.
Digitalization has also changed the way our customer interacts with us as providers, but not all customers are adept with the digital interface. Fraudsters are manipulating these weaknesses to access accounts and siphon data or even take over the account to gain extra information or obtain devices and equipment for resale.
1 in 9 applications are believed to be fraud, with Asia and South America being the top destinations for stolen devices.
Where does fraudulent traffic originate? Top countries are the same as highlighted in 2021 with the U.S., United Kingdom, and India. Four Caribbean countries experienced the highest fraudulent traffic termination destinations in 2023.
CFCA has conducted the Fraud Loss survey since 1999. The survey included responses to large and small communications service providers (CSPs) worldwide, including wireless, wireline, broadband, and narrowband CSPs and voice, data, financial services, content distribution, and Internet of Things (IoT) providers. The full survey is available to CFCA members and encompasses a multitude of fraud insights.