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Combating

Roaming Fraud with


Global Intelligence
James Stewart: Fraud Product Management
Content
Scoping the Problem of Fraud

The Impact of NRTRDE

Fraud Hot Topics

Has the Threat from Roaming Fraud Changed?

Fraud Protection

Considering Alternatives

Summary
The Scale of Fraud

Annual global fraud telecom losses :


$72 - $80 billion (USD), ~4.5% of revenues *
(Luxembourg GDP $40 billion (USD) !)

Assuming minimum 10% is related to Roaming Fraud !


(Liechtenstein GDP $4 billion (USD) !)

A value of Fraud up to 6% of total company revenue is not unusual


Control to less than 1% of revenue is regarded as good performance

*Source: CFCA (Communications Fraud Control Association)


Will Fraud hit me and how much?
Most likely, but Roaming Fraud hits like lightning
Apparently at Random
Only <1% of Telecom networks hit at the same time

1 severe Fraud case (within a week-end): Pain ~2.9M


The Impact of NRTRDE

October 2008: NRTRDE mandatory for GSMA PMNs

Today: 95% has implemented NRTRDE

October 09: Only 25% is effectively using NRTRDE

Today: Effective use of NRTRDE in fraud detection?

Impact on Fraud?

.
Why Roaming Fraud is Increasing
Global Economic Situation
People out of work telco knowledge is on the street
People with the skills fraud is now their career - survival
Operator budgets have reduced reductions in fraud
protection
NRTRDE / Telco awareness
Better protected networks push fraud to different locations
Ease with which SIMs can be presented at remote locations

6
Hot Topics
2009 / 10 Topical Threats
Frauds
SIM Cloning
PRS
IRSF
SIM Boxes

8
PRS Fraud

Subscriber 10

Call 5
PRS Operator
Provider
PRS Fraud While Roaming

Subscriber

Call 5
PRS Operator
Provider
15

10
International Revenue Share Fraud

PRS

Number
Range
Holder

International
Premium Rate
Transit Transit Transit Content
HPMN VPMN Number
Carrier 1 Carrier 2 Carrier n Provider
Provider
(IPRN)
NRTRDE Changes in Discussion

GPRS reconsidered but will not yet be made mandatory


Will fraud move from voice to data?

SIM Cloning and associated liability

Maximum call / partial duration

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Roaming Fraud Risk - Impact

Scenario Single Medium Large


1 SIM 10 SIMs 50 SIMs

Limited
Type: 2 /min single call 1,560 15,600 78,000
Transmission of HUR within: 12 h
Reaction of HPMN within: 1 h

Typical
Type: 3 /min double call (call hold + call forward) 10,080 100,800 504,000
Transmission of HUR within: 24 h
Reaction of HPMN within: 4 h

Severe
Type: 4 /min (e.g. satellite.) conference call: 57,600 576,000 2,880,000
6 calls / SIM
Transmission of HUR within: 36 h
Reaction of HPMN within: 4 h

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Fraud
Protection
Global Intelligence is a key to solving Roaming Fraud

Obstacles
- No local knowledge of events
- Limited knowledge of local
fraud

Frauds migrate
- A pattern of fraud may be
common in one location
and unheard of elsewhere

- Recognizing patterns enables


more rapid detection when frauds
move to new locations
Analysis
Apply roaming-specific detection
Monitor risky destinations, numbers or patterns
International calls to non-home locations
PRS numbers may not be obvious
Consequences
Time taken for data to reach home
Potential for duplicate data
A network Cost partners to be paid
Far, far, Liability disputes
away

Behaviour
Subscribers may behave differently when roaming.
Fraudulent behaviour uses the time-lag to detection.
MACH Fraud Protection
Definition Delivered by MACH using:

Outsourced fraud detection


Customer data:
NRTRDE
Alerts sent to operator,
when fraud is identified.
Fraud
TEXT TAP
HUR
Protection
Fraud Management Systems
On-line access to data,
including ability to search Fraud Analysts
on IMSI.
Global Intelligence
ProtectCase Option
Serving Clients Globally

MACH is the greatest single source of NRTRDE data. More than 50% of operators use
MACH, more than any other NRTRDE provider.

MACH Provides Fraud Protection services to nearly 50 operators in 40 different


countries, bringing global intelligence and insight to fraud detection

Over a six month period the average fraud found per customer was 40,000 per month
Alternatives
to Fraud
Protection
The cost of alternatives to outsourcing

Alternatives to Outsourcing Fraud Protection


Add NRTRDE to an existing Fraud detection system, or buy a new system
Or protection by prayer.

OPEX OPEX
CAPEX
(External) (Internal)

Fraud Application Application Maintenance Fraud Analysts


Hardware Hardware Maintenance IT Support
Change requests Training
Training

20
In Conclusion

Fraud can hit at any time


And often out of office hours

Fraud Protection provides


another lock on the door
analysis from a different perspective

The average value of fraud detected each month,


far exceeds the cost of the service.
Thank you

James Stewart
jast@mach.com

www.ma Date: 07/06/2010