What is Telecom Fraud?
Any type of conduct intended to take advantage of and gain an edge over telecommunications firms through deceit is considered to be telecommunications fraud, also known as telco fraud or telecom fraud (fraudulent practices).
This includes interconnecting bypass fraud and IRSF (International Revenue Sharing Fraud), both of which involve the misuse of premium phone rates by fraudsters.
There are three main types of telecom fraud.
Based on the people the fraudsters are targeting, we shall group the numerous telecom fraud schemes into three main types. These groups include:
Traffic Pumping Schemes: These schemes increase traffic to a high-cost site using "access stimulation" tactics, which then splits the revenue with the fraudster.
Schemes to Defraud Telecom Service Providers: Telecom service providers are the target of the most sophisticated fraud schemes, which make use of regulatory gaps, SIP trunking, and other techniques.
Plans Executed Over the Phone: This category also referred to as "Phone Fraud," includes all forms of common fraud committed over the phone.
How Does Telecommunications Fraud Work?
Since telecommunication is the most widely used and oldest network in existence, accounting for 48% of global sales of consumer electronics, fraudsters have long developed methods and tools to take advantage of it.
Telco fraud is distinctive since it's frequently accepted as a given, whereas fraud attacks typically evolve swiftly over time as businesses squish them. Operators, who would rather avoid integrating complicated risk management systems into their structures, bear its expenses.
Higher-priced phone numbers
The report's call examples frequently involve premium-rate phone numbers. These premium-rate phone lines typically go to expensive locations. Anyone who provides them traffic will be offered a part of the earnings from calls to these numbers by the number's owner. This implies that a scammer who drives phoney or artificial traffic to that location will get paid for each successful call.
Traffic spiking strategies
The term "traffic pumping" or "access stimulation" refers to the first significant category of telecom fraud schemes. These are revenue-sharing systems, which are characterised by con artists that significantly boost traffic to a certain high-priced location. The destination then gives the con artist a cut of their earnings.
Spikes in traffic to expensive locations are the call signature for these kinds of scenarios. Fraudsters frequently profit on the customers of a service provider's deficient security procedures. When a customer's network has been compromised, huge fraudulent charges are frequently refused, leaving the service provider to pay the bill. Attacks commonly occur over the weekends and on holidays when networks are typically less regularly watched.
Fraudulent Call Forwarding
One typical type of VoIP telecom fraud is the Call Forwarding hack. In this instance, fraudsters obtain access to a voicemail system's IVR or an enterprise PBX. They can then set up call forwarding to a pricey long-distance location to take advantage of a revenue-sharing arrangement.
The terms of service for the service provider typically make it very clear that the consumer is responsible for fraudulent calls made using their phone system. However, in practice, very few clients actually pay for fraudulent calls, and the service provider takes the financial hit because their carrier compels them to.
Numerous Transfer Fraud
The call forwarding scam that was previously discussed is improved in multiple transfer fraud. In this fraud scenario, as soon as the call recipient picks up, the call is transferred from the call source. The fake call is still in progress with two expensive destinations when the call is moved, and the call source hangs up. This fraud tactic is particularly damaging for a number of reasons:
● Two call legs to expensive destinations are the outcome of each bogus call.
● It is more challenging to pinpoint the origin of the fraudulent calls because the call source is no longer present in the call.
● The compromised call source can set up thousands of concurrent fake calls through the service by quickly repeating the operation, one call at a time.
The highest number of concurrent calls from a single client is typically limited by soft switches. However, due to the short call leg between the hacked phone source and the Softswitch, this call transfer fraud scheme cannot be stopped by concurrent call limits. A client phone that has been compromised and only has one call channel to a Softswitch can produce thousands of simultaneous bogus calls.
A smart method of amplifying the impact of telecom fraud while making it more difficult to uncover is called transfer. Once a fraudulent call is transferred, it remains active until the carrier disconnects it. Customers of SecurityGen report that calls go on for more than 24 hours.
Fraud using one ring and one cut (Wangiri)
Wangiri translates to "one and cut" in Japanese. That is, one ring, and the call is disconnected. This one ring technique is used in wangiri phone fraud schemes as a quick way to generate income. A scammer will program a machine to call a huge number of random phone numbers. Each ring only once before hanging up. On the recipients' phones, this registers a missed call from a certain number.
Users frequently dial the missed call number after seeing a missed call because they think a real call was cut off or because they want to know who called. With the same dialing technique as calls to US phone lines, this scam is frequently used to place calls to Caribbean nations. The phone number turns out to be a premium rate line, which can be used for everything from sex services to "free gifts" to advertising.
VoIP fraud is and will continue to be a profitable criminal enterprise. As VoIP becomes more widespread, there will be increasingly sophisticated and potent ways to game the system. In order to guarantee that their networks are secure from every viewpoint, VoIP providers and businesses must collaborate. VoIP service providers can reduce their fraud risks by protecting networks and monitoring traffic for fraudulent activity.
For VoIP providers, SecurityGen solutions efficiently get rid of the issues with traffic pumping fraud, PBX hacking fraud, revenue sharing fraud, blind transfers, and Telecom fraud. The answer is to implement intelligent monitoring that assesses financial risk by Source IP, Calling Number, Customer ID, and Detailed Dial Codes in almost real-time (country, state, mobile). When the financial risk is above average compared to historical norms, SecurityGen solutions generate alerts or stop calls. Call redirection, call banning, and fraud blacklists are further elements of SecurityGen fraud detection.
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