Industry Report on Telecom Fraud Management Services, Software & Strategies

The effect has been to open the bypass floodgates for fraudsters.
Well, the good news is that IRSF fraud is getting plenty of telco attention these days. The net effect, we predict, is that the financial damage caused by IRSF fraud will decline. Here are the solution forces at play:
  • Leading international wholesalers are taking steps to help their retail partners – These wholesalers have launched a significant anti-fraud prevention program to help their retail carrier partners. They initiate programs to either share fraud intelligence with each other or simply stop the traffic according to a blocking policy approved by the retailer.
  • Fraud Detection Integration with Billing and Routing – Telarix recently announced support of IRSF fraud capabilities: it’s an important milestone because the majority of tier 1 wholesale providers use its unified billing and routing platform.
  • Pre-Call SIP Invite Blocking of Fraud is a Major Trend – TransNexus has pioneered the use of SIP invite as a method of blocking blacklisted numbers before calls are made. Meanwhile Equinox Information Systems plans to combine SIP invite capability to create a hybrid solution to buttress its U.S.-market-leading CDR analytics-based FMS.

Fraudsters are Winning the Stealth Game in Bypass Fraud

A few years back, the term “bypass fraud” was practically synonymous with voice fraud via the SIM box. But the march of network, software, and mobile technology has brought new stealth tools and fresh avenues to deliver bypass fraud. The effect has been to open the bypass floodgates for fraudsters.

In the SIM box area alone, human behavioral simulation tools have made it devilishly hard to detect bypass SIM boxes via CDR analysis alone. And SIM Servers are automating multi-national bypass operations by rotating cards from a central bank of SIM cards located halfway around the world from the infected country.

What’s more, bypass is spreading to SMS and is finding avenues through ghost trunks and OTT apps such as VIBER on the mobile phone.

Still, SIM Box bypass is the problem that refuses to go away. In 2013, the CFCA estimated the telecom loss through bypass to be about $2 billion a year. Other reports claim losses of $3 billion to $5 billion per year.

So, why does the fraud continue to cause such massive losses? In fact, operators in some countries affected by SIM box fraud will privately tell you that their international inbound traffic has decreased by as much as 50% in recent years!

What’s more, these same operators have invested heavily in anti-fraud campaigns - and they actually do detect and block fairly large volumes of SIM boxes on a daily basis.

So what does this mean? It means that the fraudsters are succeeding despite the anti-fraud efforts of the carriers. They are replacing the blocked SIM cards with fresh supplies of SIMs and continue their bypass.

Here are some crucial developments in taming bypass fraud:
  • Test Call Generators (TCGs) – TCGs are the key to examining the grey routes where bypass traffic is coming from. Araxxe deploys TCGs as a managed service for operators in the Middle East and North Africa and claims the secrets to stopping bypass are two: 1) be highly selective in the interconnect routes you monitor; and 2) run test call programs during the opportune calling periods of the country being served.
  • Integrated Bypass Solutions are Coming – SIGOS, the global leader in test call systems, has announced a new bypass-specific solution that combines the virtues of a next-gen FMS and TCGs in a single platform.
  • Protocol Signature Analysis, a new probe technology developed by LATRO Services, stops bypass by recognizing the unique behavior of the SIM box as it signs onto the network.
  • SMS Bypass Blocking has Arrived – As demand for A2P SMS traffic goes up, mobile operators are flooded with unauthorized marketing messages and other fraudulent uses of A2P. SMS specialty firms such as Infobip are delivering fraud protection through managed services solutions that detect and block illicit traffic. CSG International, through its test call machines, is checking SMS quality and SMSC network element mapping to ensure contracts are being followed and A2P traffic is truly routed via premium routes.
  • OTT Bypass is Not Fraud, but it’s Killing Mobile Operator Profits – The growing practice of wholesalers redirecting mobile-to-mobile traffic from the PSTN to a VoIP application like VIBER or WeChat is seriously cutting into mobile operator revenue. The big mobile groups are thus eager to discover which wholesalers are causing the bypass, so commercial solutions to monitor this bypass are appearing from SIGOS and IPsoft.


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