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Flavours of fraud: there’s a lot to worry about

In our last blog, we noted the extent of a rapidly growing problem for telecoms service providers.

A recent European Union survey[1] found that 56% of all consumers were victims of one sort of fraud or another. Of those, 15% were defrauded via their mobile phones, another 14% via their landlines. That ought to worry CSPs enough to take action, by investing in products that help them to combat and reduce fraudulent activities.

It’s an inventive market!

While protections and security measures in telco appear to be failing to combat fraud to the extent required, the fraudster’s tactics are also endlessly inventive. As the network evolves rapidly and telecommunications traffic increases, so the fraudster appears ever ready to exploit opportunity with a new scheme. For example, increases in fraud attacks on increased international voice traffic flows during the COVID-19 pandemic were notable.

Some examples of telco fraud

What does this growing arsenal of fraudulent schemes look like? While some ploys target and defraud the network operator directly, many of the higher-profile (and thus higher-publicity) scams are directed at the end- ustomer.  Among the particularly rife schemes at present are:

Text scams

  • These often work by offering money for an accident you may have had but are, in fact, a ploy to acquire personal details that are later used for fraudulent purposes. Consumers should simply delete such messages. But they don’t.
  • A variation is receipt of a text or advert encouraging entry into a competition for a desirable prize. The reply will be charged at exorbitant rates; often as much as UK£2 per text message. Again, consumers should ignore such enticements. But they don’t.

Trivia scams

  • These involve enticing the consumer to answer general knowledge questions with the reward of winning a prize for responding correctly. The questions are staggered to keep the respondent playing, easy at first but becoming increasingly difficult until the final question, the answer to which unlocks the prize, is near impossible.
  • It gets worse. If the consumer tries to claim a trivia scam prize, it will likely involve calling a premium-rate number, listening to a long, recorded message, and remaining online for a considerable time while charges rack up. Do all that and it’s unlikely that there will even be a prize at the end (though the respondent is likely to be deeply familiar with Vivaldi’s Four Seasons if they get that far!)

SMiShing

  • These scams generally involve the fraudster asking for personal or financial information. The message will appear to be from a legitimate company, often a mobile phone provider, but even though legitimate companies never ask for sensitive information by text, nevertheless consumers respond.

There are a lot of varieties of fraud. But the good news is that means there are a lot of opportunities for suppliers whose products and services help CSPs address the problem. eCS has been helping vendors identify and qualify prospects for solutions in the area of combatting fraud for over 20 years. If you’d like to learn more about our expertise in this domain and how we can help you, please click here (INSERT LINK)

[1] https://ec.europa.eu/info/sites/default/files/aid_development_cooperation_fundamental_rights/ensuring_aid_effectiveness/documents/survey_on_scams_and_fraud_experienced_by_consumers_-_final_report.pdf

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