fraud management tvass ans
DESCRIPTION
Telecom sector suffers over $ 50 loss due to fraud. The presentation describes the types of various frauds and the frame work to combatTRANSCRIPT
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Telecom FraudLatest Trends and Combating
Ahmad Nadeem SyedDirector Revenue Assurance & Fraud Management
Mobilink
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Who I am?
● Currently Working as Director Revenue Assurance & Fraud Management
in Mobilink
● Total Experience – 30 Years
● Telecom Experience – 22 Years
● Expertise- Revenue Assurance, Fraud Management- Billing & Collection- Financial Management- Business Planning and Budgeting- Interconnection and Cost Modeling- Process designing and Computerization
● Published articles in newspapers and international magazines, two books on Telecom & Internet acronyms
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Telecom Sector is a Favorite
Playground For Fraudsters
Fraud Is A Universal Truth
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How much are Telcos Losing?
● Rob Mattison of GRAPA estimated the loss upto $40 B (1%-30%) annually in 2005
No. Major Leakage Areas % ShareNetwork
1 New Product development and tariff configuration 13.0 2 Poor system integration from MSC, IN, Mediation & Billing system 12.0 3 Significant configuration changes in any network elements 14.0 4 CDR generation issues at MSC and incorrect usage data 8.0 5 Inteligent network charging failure 8.0
Total Network 55.0 Business & Fraud
6 Retail billing system errors 8.0 7 Interconnect partner payments 7.5 8 VAS partner payments 9.0 9 Credit Management 7.0 10 Frauds (internal & External) 8.5 11 International Roaming settlements 5.0
Total Business 45.0 Total 100.0
KPMG Survey 2009
● Juniper research figured out the loss at $58b (6%) for year 2011
● According to KPMG Survey 2009, bout 45% leakage
pertained to fraud
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I Would Not Commit Fraud:
Because
● I do not have the opportunity
● My morals do not allow me
● I do not have a motive (May be too old to enjoy the money)
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Fraud Types - GSMA
Technical1. Mailbox Hacking (CLI
Spoofing)2. IMEI Reprogramming3. Call Forwarding
Fraud4. Call Conference
/Multi -Party Calls5. HLR Tampering /
Switch Manipulation6. SIM Card Cloning7. False Base Station
Attack8. Spamming (SMS & IP
services)9. Phishing and
Pharming10. Mobile Malware11. GPRS Over-billing12. Voice over IP Fraud13. PBX Hacking
SUBSCRIPTION / PAYMENT FRAUD
1. Subscription Fraud2. Proxy Fraud3. Call Selling4. Direct Debit Fraud5. Credit Cards -
Stolen/Compromised
6. Credit Cards - Counterfeit
7. Credit Card-Not-Present Transactions
8. Cheque Fraud
DISTRIBUTION FRAUD
1. Dealer Fraud2. False Agent / Remote
Activation Fraud3. Theft & Handling
Stolen Goods4. Handset Subsidy Loss5. Mail Order Fraud
BUSINESS FRAUD1. Premium Rate
/Audiotext Service Fraud (PRS)
2. Roaming Fraud3. International
Revenue Share Fraud4. Interconnect Abuse
(GSM Gateways)5. Mobile to fixed
network Gateways Abuse
6. False Answer/False Ring
7. Social Engineering8. Internal Fraud9. Normal Business
Fraud & Crime10. Brand Name/Logo
Abuse11. M-Commerce
Provider Content Fraud
12. M-Commerce Provider PRS Fraud
13. Content Theft14. Wangiri
PREPAID FRAUD1. Prepaid Services
Fraud - General2. Prepaid HLR Profile
Manipulation3. Manual Recharging4. Generation of
Abusive Credits5. Scratch Card Abuse
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New Dimensions Experienced
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GSM Network/Systems Leakage/Fraud Points
Collection System
BSC
VLR
Other Mobile Networks
PSTNHLR AuC EIR
RBS
RBS
RBS
MSC
GMSCSMSC
Mobile Phone Subsystem
Base Station Subsystem
Core Network Subsystem
SIM + Hand Set
SIM + Hand Set
SIM + Hand Set
MediationIN
Platform
On Net Calls
On Net Calls
GSM Network
Bills
Invoices
Rejected events
Rejected events
Postpaid
Interconnect
Billing Systems
PrepaidRejected
User
User
User
$
$Bad Debt
Bad Debt
International calls
International Roaming
International Gatewy
Voucher Management
Voucher Management
Tariff Management
Adjustments
Customer Relation Management System
Sales and Distribution System
Billin
g, C
harg
ing &
Co
llecti
on Sy
stemTe
leco
m R
isk C
over
age
Sales and CRM
Voucher Management
Leakage
Fraud
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Opportunity Syndrome
Fraud is all about● Availability of opportunity & ● The ability to avail the same!
The opportunities Could Occur By:● Executive Errors– flawed policies, processes and disintegrated
systems● Incidence – Mistake/Error● Collusion ● Design – Technological Advancement
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Executive Errors
Flawed Policies● Your money my play – Check payment trickery● Fake Sales – Commission● Fake Mobile Number Portability – (Commission and lack of Regulatory Controls)
Flawed Processes● Bank reconciliation - Transactions Juggling● Fake Bank accounts● Defaulters Restoration ● Illegitimate Loyalty points redemption ● Illegal numbering series creation● Official phone package misuse
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Incidental
● Tariff table mistakes in network & Billing systems– Masses get benefit
● “Local Prefix” International dialing - Masses get benefit
Design - Technological Advancements
● Bypass Traffic – New Methods
● International Roaming Fraud - Unauthorized Roaming
● Premium Rate Service (PRS) – Number Range Selling
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What are by-passers doing?
● Using Moving objects like TV Van, Boat etc. with satellite dish
● Access to switch by connecting to OF main cable in collusion with
operator’s technical staff
● LDIs having LL licenses - Replacing “A” number with own LL’s No. and
terminating on national trunks
● Local Loop termination using LDI’s transit service after replacing “A”
No. with own No.
● Ditching controls by
- Avoiding high usage with regard to numbers or location
- Using numbers all over their/other’s licensed territory
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Collusion
Unauthorized International Roaming ● Inbound Roaming● Outbound Roaming
Defining illegitimate GTs & numbering ranges in host network may be with collusion
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Combating FraudA Multidimensional Activity
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Fraud Management Framework
Investigation
Prevention
CorrectionDetection
Saved $ 8 M
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Empowerment● FM department has requisite authority related to
investigation, prevention and correction● This authority must be:
* Endorsed by no less than CEO* Recognised by other departments
● SLAs need to be signed with other departments
Combating Fraud
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Cross Functional Responsibility
● FM department can not fight it alone
● FM is dependent on other departments on provision of data and systems
● Detection is a joint responsibility – Outside tips are a major source
● Establishing incident reporting mechanism – (Short Code Portal)
● FM need to be involved in change management process (affecting
revenue) by other departments particularly technical,
● One POC in each department ensuring action
Combating Fraud Contd…
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Combating Fraud
Real/Near Real time Data Availability● Must be sourced in directly and independently ● Must be both processed and unprocessed● Data includes transactions/CDRs and activity logs
Systems● High speed Data Processing● Varying formats readability● Flexible in terms of business rules definition and data● Administration within FM● Case management enabled● Equipped with Business Intelligence Tools ● Integrated to other financial and technical systems
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Combating Fraud Contd…
Skill Set ● Forensic Analysts
● Process reviewing competence
One Umbrella● Fraud Management and Revenue Assurance under one chain of command
● Benefits of Synergies – Complementing each other
● Common Data Sourcing
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Knowing and Ensuringthat
A minute in air is translated into cash in company’s hands
Maximum and In Time
Air to Cash Reconciliation Model
(ATCR)
An End to End Reconciliation Concept
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Air to Cash Reconciliation Model
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Total Traffic
Discounts/Free Minutes
Chargeable
Traffic
Post Paid Voice & VAS
Total Traffic
Discounts/Free
Minutes
Chargeable Traffic
Pre Paid Voice & VAS
ATCRPostpaid Billing System
IN Platform
Accounts
Receivable
Commission Calculator
Bank Recon System
Sales Management System
Customer
Service System
Inventory
Management
Front End Cash
System
OTAR Platfor
m
Voucher Manage
ment System
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Combating Fraud Contd…Ethical Fraudster
● Job Description – Breaking the process & Systems
● Objective is: * Knowing the Weaknesses of Systems & Processes* Test detection Ability Fraud Management Department
● Planned and Ongoing Activity
● Management Consent Required
Process/System Evaluation● Identifying gaps in the processes and Systems
● Ensuring Fixing
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Combating Fraud Contd…
Inter-operator Co-ordination● Sharing minimum information about fraudsters and fraud
without compromising confidentiality
● Black listing on all the networks
Regulators Role● Objective – protecting government losses and consumer’s interests
● Issuance of regulations and Systems installations
● Blacklisting fraudsters
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Remember● Criminals continue to be ahead of law● Colluder continue to join hands● Mistakes continue to happen● You can
- Detect or even stop repetition of the past incidents
- Develop early warning indicators for any new occurrence
- Develop controls for new occurrence proactively but to an extent
● You can not guarantee “No” fraud situation
But ● You can guarantee being Alert 24/7