Top Five Frauds The Telecom Industry Has To Deal With – 2023 Edition

The telecom industry is innovating rapidly.

PWC reports that over 200 telecom companies had already launched 5G networks by the beginning of 2023. It further predicted that 50% of global telecom connections would be 5G by 2025. It is further expected to increase to 75% by 2027.

This year, the telecom industry has also ramped up the focus on AI and IoT and increased attention paid to cybersecurity.

While the constant focus is on improving connectivity and security, the telecom industry is also witnessing an increase in telecom fraud.

Telecoms are losing billions to frauds like Robocalls and SIM Box, impacting profits and customer trust.

Let’s look at these frauds that have kept the industry on edge and find out how they can tackle them.

Top Five Frauds That Telecom Industry Is Dealing With In 2023
  • Vishing scams

Vishing scams rose by 550% in 2022.

In vishing attacks, scammers use AI to clone voices to sound trustworthy. They use call ID spoofing to make the call look reliable. They call and impersonate a government agency representative or a relative and deceive the users into sharing personal details like credit cards and social security numbers. The scammers specifically target the elderly population as they are the most vulnerable group. According to the Cybercrime Support Network, 38% of the reports submitted to the FTC were by users aged 80+.

While users are expected to exercise while receiving voice calls, telecom companies must invest in technologies to prevent it. Technologies like Artificial Intelligence and Machine Learning (AI/ML) can help companies detect and prevent fraudulent activities in voice calls.

  • Impersonating SMS Frauds

Like impersonating calls, people are also falling prey to SMS impersonation. This is especially a concerning scam in the banking industry. According to a 2019 report, there has been a twentyfold increase in text fraud in the coming years, and the trends seem to bear that out. Here’s how it typically works. A user receives a text with a link from a fake bank number. When they click on the link, they receive a call from the alleged bank.

The caller asks for sensitive information. The user eventually loses money if they share sensitive information with the caller. SMS fraud through impersonation has led to a median loss of $3,000 last year.

The Federal Communications Commission (FCC) has directed mobile operators to block robotexts and prevent scams. Mobile operators can use AI/ML or blockchain solutions to reduce fraud and safeguard customers from losing money.

  • SIM Box Frauds

In SIM Box Fraud, a SIM Box device routes international calls as local calls. This helps the fraudsters avoid paying the higher international call rates and earn profits. Since the calls get routed, telecom companies lose revenue from the international calls. Additionally, the routing leads to unprecedented traffic on mobile networks and poor customer service quality.

Telecom companies can solve this problem by monitoring network traffic for unusual activities and blocking or filtering calls that display patterns that are different from the usual. Companies must also develop new solutions that can help them detect and prevent fraud. They must also cooperate with law enforcement agencies and share regular information to thwart all routing fraud attempts.

  • International Revenue Share Fraud (IRSF)

IRSF fraud has been a threat for many years. However, reports suggest that it has significantly increased in the past decade. These scams involve scammers pumping traffic to premium-rate international numbers. It affects the revenue-sharing agreements and the bottom line of telecom operators globally.

Telecoms can use firewall solutions to identify and prevent fraud from local and international markets.

  • SMS Grey Routes

Like artificially inflated calls, scammers are also using grey or unauthorized routes to bypass internationally approved routes and deliver SMS to users. They avoid paying the termination fees to mobile network operators (MNOs), resulting in unnecessary losses.

Operators can combat this issue by implementing solutions like:
  • Monitoring traffic to identify and prevent grey route activities
  • Implementing SMS firewalls to block messages originating from grey routes
  • Collaborating with other MNOs to blacklist potential grey routes and take action against malicious actors

These combined efforts can help operators reduce losses and safeguard their integrity.

How Can the Telecom Industry Combat Frauds?

As frauds increase, 92% of carriers have started prioritizing them to protect customers and safeguard their reputations.

Some telecom companies have started using blockchain for subscriber authentication, detecting roaming fraud, and blocking stolen devices. A few others are using flash calls as a part of two-factor authentication to reduce dependency on One-time Passwords (OTP).

Technologies like AI/ML are helping telecom companies detect and prevent fraud in real-time.

As frauds become more sophisticated, telecom companies must replace reactive and traditional fraud detection systems with proactive ones.

They must invest in anti-fraud solutions that cover various aspects of telecom fraud.

At Globe Teleservices, we have built solutions that help enterprises and telecom operators prevent voice, SMS, and network traffic frauds, allowing them to preserve revenues and maintain customer experience.

To know more about these solutions that can help telecom companies prevent fraud, contact us.

 

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