Taking Action Against Fraud - Demonstrating Leadership Against Telecoms Fraud
ITW Global Leaders’ Forum (GLF), a leadership body of the International Carrier Industry, has published the first ever report on international wholesale telecoms fraud. The report, which was published in partnership with Delta Partners, estimates that fraud costs businesses and consumers as much as $17 billion annually and calls on stakeholders to cooperate further in order to reduce the devastating impact of fraud. Below is an executive summary of the report’s main findings.
Fraudulent traffic is estimated to cost the international wholesale carrier industry $17 billion annually, but the sources of fraud continue to change. In the last 12 months carriers highlight missed call campaigns and private branch exchange (PBX) hacking as having increased most significantly.
85% of carriers cite fraud as a priority for their organisation with 74% saying that it’s growing in importance. Enhanced technology helps support an increased number of fraudulent traffic incidents but, from a carrier’s perspective, a greater ability to quickly respond.
Having dedicated fraud management full time employees (FTE) who are not linked to commercial performance is critical to ensuring that they have clear incentives to reduce fraudulent traffic.
The use of fraudulent traffic by organized crime to raise and distribute funds highlights how important it is that international carriers work to reduce fraud as the impact goes beyond the carriers’ profit and loss.
While most carriers can identify and remove fraudulent traffic from their networks within six hours, contractual service agreements and a fear of mistakenly blocking legitimate traffic can make removing fraudulent traffic complex.
Proactive customer management and allocating additional FTE are the two primary internal carrier requirements to reduce fraudulent traffic - only 5% carriers see technical innovation, such as AI, as a reason to reduce FTE focused on fraud management.
Nearly all carriers track some metrics to manage fraudulent traffic. However, there is a lack of consistency in metrics tracked and less than 70% of carriers report these to the CEO’s level.
There is a disconnect between carriers prioritisation of fraudulent traffic as a strategic priority and the recognition of its financial impact – only 21% of carriers are able to identify an OCF of over 3%. Several carriers are working together informally to share information and pool resources, subject to competition law requirements, to address fraudulent traffic and there is an appetite for greater collaboration.
The GLF Code of Conduct is being adopted by many leading international carriers with 25 signing up in its first seven months, but carriers want more action beyond this commitment.
Through commitment, compliance, and collaboration the carriers will collectively act to move their organisations and the international wholesale industry towards a fraud-free future.
All carriers are encouraged to adopt the Code of Conduct as well as seeking support from their customers and suppliers.
Carriers are encouraged to self-attest adherence to the Code of Conduct and measure a common set of metrics communicated to CEO / Business Head level.
Formalising information sharing and communication networks across the carrier community will improve the ability to collaborate in the shared aspiration of reducing fraudulent traffic.
If you want to read the full report, please download the PDF below.
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