Telecommunication fraud is the use of telecommunication services without paying the service provider it. The loss due to telecommunication fraud in 2011 was $40 billion dollars. According to the Communications Fraud Control Association (CFCA), after they had conducting their worldwide telecom fraud survey in 2011, they listed the top five causes for fraud loss incurred by operators were.
- $4.96 Billion (USD) – Compromised PBX/Voicemail Systems
- $4.32 Billion (USD) – Subscription/Identity Theft
- $3.84 Billion (USD) – International Revenue Share Fraud
- $2.88 Billion (USD) – By-Pass Fraud
- $2.40 Billion (USD) – Credit Card Fraud
That is almost $20 billion worth of fraud done by just using five methods of fraud! Let us take a look at them.
PBX stands for private branch exchange and PBX hacking allows hackers to get access to this point of exchange, allowing them to use it for a way to make long distance calls and stick the bill to the victim. They can also re-sell that exchange point to someone else to use for long distance calls. As the PBX technology has been there for years and prevalent in almost all businesses, it has allowed hackers to understand and exploit it better.
Identity theft is a straightforward way of committing fraud as hackers with the details of any person can use their credentials to subscribe to any services provided by a communication service provider (CSP). As most CSPs have bundles and packages of services such as internet, mobile network packs, landline, etc, all put into one deal, this allows the hackers to enjoy all these services for free and these accounts will not shut down until the company notices non-payment for their services.
International Revenue Share Fraud is done when hackers divert international calls through highly concentrated phone traffic and connect them to number that charge fees to call them. This makes the user pay for calls they think they will not charge exorbitantly for, only to get a massive shock in their phone bills.
By-Pass Fraud is when illegitimately procured Subscriber Identity Management (SIM) card is used to make international calls but they appear to look like local calls to the CSPs. This makes the CSPs foot the bills for the international calls to other carriers and lose revenue from the calls that were not charged to be international calls even when they were.
Credit Card Fraud is done when the hacker obtains details of a person’s credit, allowing him/her to steal their financial capabilities to purchase services from CSPs and using the credit card until it hit its credit limit. This cause the most harm to the customers of the CSPs.
An easy way to avoid this is to have strong passwords that you do not share as well as having security software that protects against hackers. However, as technology and innovation drives ahead, hackers will get smarter and craftier at telecommunication fraud. The CSPs have enough resources to protect themselves, however you need to be on the lookout for fraud as it could strike you at any moment.