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Industry Report on Telecom Fraud Management Services, Software & Strategies

By: Dan Baker

The global village has fallen in love with the versatility that telecom industry progress has brought us. Unfortunately, there’s a trade-off because communications advances bring with them new fraud and security risks.

Take the business PBX. Its ability to redirect phone calls is wonderful for business people. But that feature opens the door for PBXs to be exploited through International Revenue Share Fraud (IRSF), a fraud which costs telecoms $4 billion a year according to the CFCA.

GSM is another example. It triumphed over CDMA partly because it was more versatile. Users loved the idea of popping a SIM card in and out of a handset. But that versatility also came at a cost, for it has enabled SIM box bypass, a growing fraud issue across the globe.

To explore how telecoms are keeping a lid on their old and new fraud problems, Technology Research Institute (TRI) conducted three dozen interviews with fraud management solution suppliers, service provider experts, and consultants. The result of this research is a 239-page report entitled, Telecom Fraud Management Services, Software & Strategies.

Overall we forecast the global market for telecom fraud management solutions – including software, service bureau, databases, test call generation equipment, and managed services – will reach about $600 million in 2015 as show in the forecast chart below.


A Collaborative Effort to Tame International Revenue Share Fraud

International Revenue Share Fraud International Revenue Share Fraud (IRSF) is one of the telecom industry’s most enduring problems. PBXs are the leading gateway to IRSF. Groups based in countries like the Philippines are continually dialing out to nations of the world to hack PBXs. Once they gain entry, they sell that intelligence to their organized crime partners who make the IRSF calls. The favorite time to initiate IRSF fraud is Friday evening and the idea to rack up $50,000 worth of fraudulent traffic before Monday morning when the operator’s fraud management team comes back to work to discover the security breach. One particularly successful form of IRSF fraud is Wangiri (Japanese for “one ring”). With Wangiri, the fraudsters generate tens of thousands of very short duration calls then hang up. And if the fraudsters are lucky, as many as 20% of the people who missed the call will ring back to find out who it was and be connected to an IVR. And the message will say something like: you've just won a new iPhone – or anything to keep the caller on the call as long as possible.


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