Non network fraud - r


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The presensetation descibes the various types of non-network frauds faced by telecom sector, which is a major threat but offten not given the requisite attaention thus causing huge losses.

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Non network fraud - r

  1. 1. TacklingNon-Network Telecom Fraud The Key to Business Assurance 7th WeDo Technologies Worldwide User Group Meeting 2012 Ahmad Nadeem Syed Director Revenue Assurance & Fraud Management Mobilink 1
  2. 2. My Brief Profile● 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 -Process Re-engineering -Financial Management -Business Planning and Budgeting -System Designing and Computerization 2
  3. 3. My Pakistan - My MobilinkArea: 796,095 sq km Population: 190 Million GDP PPP $488 billionFixed Line Subs 3.5 Million Internet Users 20 MillionMobile Operators - 5 Mobile Subs 112 Million Mobilink – An Orascom/Vimplecom CompanyMobilink Subs 35 Million Mobilink is Market Leader 3
  4. 4. Cruising through the Presentation● Types of Telecom Frauds● Non-Network Frauds – Types and Modus Operandi● How the opportunity is created?● Solutions 4
  5. 5. Main Categories of Telecom Fraud● Network Any fraudulent activity, where network is involved such as usage, subscription, PRS etc. externally or system configuration changes with mala fide intentions internally.● Non-Network Any activity related to business operations in connection with customers such as sales, collections, commissions etc.● Business Operations Usual Business Frauds not related to customers 5
  6. 6. I Would Not Commit Fraud:Because● My morals do not allow me● I do not have opportunity● I do not have a motive 6
  7. 7. Beneficiaries● Internal● External● Colluded 7
  8. 8. Why More In Telecom● It deals with masses – Customers in millions● It has volume – Transactions in billions both traffic and value● Large size of: - Staff - Distribution channels● Multiple business systems● Severe Competition – Incentive Plans 8
  9. 9. A Few Non-Network Frauds● Your money my play – Check payment trickery● Fake Sales - Sales Channel Fraud● Fake Mobile Number Portability● Bank reconciliation - Juggling around● Defaulters Restoration● Illegitimate Reward point redemption● Fake Bank accounts● Illegal SIM creation● Used scratch cards 9
  10. 10. The Quantum Not only the quantum of non-network frauds isgenerally much bigger than network frauds but alsosuch frauds remain undetected for long time giving ample time to the fraudsters to get away with the money with little hope for recovery● Direct Loss● Indirect Loss - Extra network capacity - Overheads 10
  11. 11. Modus Operandi/ImpactYour money my play Generally as a result of collusion with staff– Check payment ● Delayed payments by Franchisestrickery ● Outstation checks ● Bounced Checks Bad Debt and delayed cash flowFake Sales/Mobile Sales staff for earning commissionNo. Portability - ● Multiple SIMs in same nameSales Channel Fraud ● Keep Active for minimum mandatory time ● Initial Low usage and full payment ● Large Usage on a few and min. on others and Default on all ● MNP number involved in network fraud Extra commission and network capacity cost 11
  12. 12. Modus Operandi/ImpactBank Internal in collusion with FranchisesReconciliation – ● Large number of Company’s bank accountsJuggling Around ● Juggling Franchises AR Balances and getting payments in own name ● Tempered reporting ● Extended over long time with small amounts Financial Loss to the CompanyIllegitimate Internalreward points ● Cash Received and pocketedredemption ● Customer account credited with reward points ● Company’s system not integrated with vendor’s system Financial Loss to the Company 12
  13. 13. Modus Operandi/ImpactFake Bank Internal Collusion with Bank OfficialsAccounts ● Opening accounts using company’s name ● Becoming signing authority ● Depositing customer’s/Franchises checks small amounts ● Siphoning the money sharing with bank officials Financial Loss to the CompanyDefaulters InternalRestoration - ● Defaulters contactedPost Paid ● Waivers granted against some cash for selfCustomers ● Connections restored, who default again ● New connections are issued to same under some other name Financial Loss to the Company 13
  14. 14. How The Opportunity is Created?● Disintegrated systems● Flawed Incentive Plans● Lack of coordination among the departments● Lack of proper Tools and controls● Non-availability of proper reporting system 14
  15. 15. What needs to be done?● Policy rationalization Including commission and sales● Integration of Systems● Regular Process Review● Business Fraud Management System : - Integrated with various Business and technical systems - Capable of importing data from various systems of varying formats - Capable of producing 4 W forensic results● Air to Cash Reconciliation Model 15
  16. 16. 4 W Investigations ● Nature of Activity? ● Timing? ● Volume? ● Past Occurrence? ● Past Trends? ● One Time ● Any Similar Activity? ● Seasonal? ● Event Oriented? What ? When?● Who did it? ● Where● His/Her past Happened? record? ● Past Trends?● His/Her links? ● Max. Expected Level? ● Past Occurrence? Who ? Where? Why ? The Fraud analyst must be suspicious by default 16
  17. 17. Air to Cash Reconciliation Model (ATRC) An end to end reconciliation concept Knowing and Ensuring that A minute in air is translated into cash in company’s hands Maximum and InTime 17
  18. 18. Air to Cash Reconciliation Model Post Paid Voice & VAS Pre Paid Voice & VAS Discoun Chargea Discount Chargea Total Total ts/Free ble s/Free bleTraffic Traffic Minutes Traffic Minutes Traffic Postpaid IN Billing BFMS Platform System Front Accou Bank Sales Custom Invent Comm End nts Recon er ory OTAR Voucher Manag ission Manage Cash Receiv Syste ement Service Manag Platfo mentSystem able System System ement Calcul System m rm ator 18
  19. 19. Ahmad Nadeem 19