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Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
Wholesale Fraud - Jason Lane-Sellers of cVidya
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Wholesale Fraud - Jason Lane-Sellers of cVidya

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Jason Lane-Sellers gave this presentation on wholesale fraud at the CFCA meeting in Arizona from 25-27 September 2012

Jason Lane-Sellers gave this presentation on wholesale fraud at the CFCA meeting in Arizona from 25-27 September 2012

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  • 1. Wholesale Fraud – anOverview OPERATIONAL RISK MANAGEMENT & COMPLIANCEJason Lane-SellersFraud & RA Expert, Cvidya© 2012 – PROPRIETARY AND CONFIDENTIAL INFORMATION OF CVIDYA
  • 2. Introduction2
  • 3. Agenda What is a Fraud in wholesale? Wholesale wholesale Fraud carrier? Management Strategy How does The role of it work wholesale in Fraud management3
  • 4. What is Wholesale?  Wholesale providers provide transit capabilities to other operators and networks  So these organizations have no consumer customers only provide services to other carriers – This mean that normal service providers do not need to have interconnection points with every destination around the world  The wholesale networks provide the backbone for international calling services  The wholesale carrier can only see transit traffic; Typically, no local traffic of carriers, no customer details, partial call data records are available to them4
  • 5. The Wholesale Scenario Operator A Wholesale Carrier Wholesale carrier transits calls to Operator other networks B around the world and maintains these relationships Operator C5
  • 6. Fraud Against Wholesale providers6
  • 7. The Fraud Question for Wholesale For wholesale carriers many of the traditional fraud risks do not apply – so do they have an interest in fraud? – In actuality the whole sale community benefits from fraud traffic as revenue is generated for them from such traffic – WS carriers have no view of originating entity or end entity, and do not have any reason to monitor for traditional type frauds – Different departments are usually involved – No Fraud teams in many WS operators – Different types of fraud/Different incentives – The fraud against WS providers may be from established international carriers – Handling fraud/disputes is a complex issue due to the nature of commercial agreements7
  • 8. Wholesale Fraud  So what are the risks to wholesale carriers?  One of the main risks: – FAS Fraud (false answer supervision) – False Answer Supervision (FAS) is when a call that is placed to a network appears to have connected and therefore starts charging, whereas in actuality the call has not actually been connected properly and therefore should not be charged.8
  • 9. FAS Increase  FAS has increased in volume over the last few years as a result of several issues, – Technology – The shift to IP based technology systems, introducing complexity and issues into connections between operators – Mobile network interconnectivity via simboxes and GSM gateways – Competition – Competitive home markets and increases in wholesale options – High termination rates impacting margins in competitive market places – Cost reduction – the need to reduce costs to improve profits – Profit – encouraging the introduction of FAS to service revenue9
  • 10. FAS – how it works  Deliberate FAS is a service that simulates a call answer “connected status” without the knowledge of the calling party and that provides false billable airtime to the calling party.  The service pretends to be a real connection and may play back real carrier service messages – e.g. "the number you are calling is not reachable at the moment, please, call back later“ - while charging for this  In certain circumstances, they may even connect the call whilst playing a ringing tone (even if number is unavailable) in order to have the customer remain on the call for a chargeable period.10
  • 11. False Answer Supervision Types FAS may be delivered for one or more of the following cases: – FAS answer after a time-out before the terminating side goes off-hook – FAS answer immediately – FAS answer with a message (e.g. dialing, please wait, etc.) – Any of the above FAS answers for certain Ingresses (PSTN or VoIP) – Any of the above FAS answers for certain Egresses (PSTN or VoIP) – Any of the above FAS answers for certain destinations (i.e. B- Number prefixes) – Any of the above FAS answers for certain destination carriers (i.e. B- Number prefixes or egresses)
  • 12. False Answer Supervision example In this graph, we have sampled the answer time Country X - number of Calls by T(answer) of calls in a western European wholesale provider No. of calls 8000 05:00-0600 06:00-07:00 07:00-08:00 08:00-09:00 to a specific destination (Country X) 7000 The graph shows a clear spike at the value 16 6000 5000 This raises the suspicion that we are dealing with 4000 Series1 FAS where a machine answers most of the calls 3000 2000 on the 16th second 1000 0 Call duration Here we suspect an automated FAS at 16 seconds after Alert
  • 13. Why would a operator commit FAS • Operators can gain from introducing FAS services, as FAS can increase their revenues by deliberately introducing FAS services into their network. • This is achieved by introducing a FAS control server on the gateway connection point. This server controls the “connect” status of the calls received. The server is controlled to introduce a percentage of FAS into the calls received, thus increasing the average success rate (ASR) of calls therefore enabling a higher charge to be applied, and usually it will mean an increase of calls, from call reattempts. Although there will be a slight decrease in average call duration (ACD) due to the short calls impacted by FAS. Example • A route processing 10,000 calls per day – introducing 10% FAS - destination cost 0.10$ transit markup 0.05$ - Thus in such an example profit on a single route can be increased by 21%. ASR (%) ACD (min) Day Turnover ($) Profit ($) Without Fake FAS 38% 4 1520 76 With Fake FAS 48% 3.5 1536 9213
  • 14. Other Wholesale Issues  Due to the complex nature of a wholesalers business and the commercial agreements, there are other issues, often referred to as fraud that can also impact a wholesale operator including: – Arbitrage & tromboning – Refiling (Re-origination) – Number Manipulation – Hijacking14
  • 15. The Wholesale Role in FraudManagement15
  • 16. The Wholesale role in Fraud Management  Wholesale providers are in a unique position – They have a view of all the traffic they carry from multiple operators – They have an understanding of the routing and termination – They can identify patterns across operators and relate activity across different operations – Can monitor and understand route profiling and behavior as it occurs – Issues such as IRSF, PRS, traffic pumping, AIT could be easily visible in real time, even if spread across multiple originating sources  However do they have the incentive to help?16
  • 17. Fraud Management Approach forwholesale17
  • 18. Strategic approach to Wholesale Fraud Management  Fraud management as a service – enabling wholesale operators to offer FMS services to their end-customers – Monitoring of the applicable transit traffic in context with all traffic – Analysis & Detection of fraud scenarios such as PRS & IRSF, Bypass, Arbitrage & Interconnect fraud, Artificial Traffic Inflation, etc. – Analysis of route and destination profiles, highlighting growing risk situations or suspect activity based on a global view – Implement numbering plans to highlight unallocated and high risk activity – Notifications to customers of possible threats – Dedicated reports & dashboards, for there customers highlighting issues and trends18
  • 19. Strategic approach to wholesale fraud management - 2 The possibility of providing deeper level analysis – Monitoring of ASR, ACD per route and destination in conjunction with origination (identify targeted attacks) – Provide contextual and trending information on all traffic being carried, alerting on new potential issues – Real time analysis with a global view – Possible call control on agreement with customers to prevent further losses –stop fraud in progress before the originating operator is aware19
  • 20. OPERATIONAL RISK MANAGEMENT & COMPLIANCE© 2012 – PROPRIETARY AND CONFIDENTIAL INFORMATION OF CVIDYA
  • 21. Benefits  For the wholesaler – Provide the wholesale carrier with an understanding of their traffic with a fraud prospective – Potential to have a great impact on major worldwide issues and assist standard operators – This Enables wholesale carriers to offer value add services to their clients – Enables wholesale carrier to be involved in fraud management on a world level  For individual operators – Gaining such a service from their wholesale carrier would give them greater intelligence and capability to detect and control usage based issues that happen via such routes (IRSF, etc), which would not be possible in their own environment21
  • 22.  Wholesalers can view all the traditional frauds that impact normal operators, however they do not suffer from any losses and actually gain revenue from this traffic The main fraud issue for wholesalers is actually fraud by established carriers The wholesale providers though are in a unique position to aid fraud management for the standard carriers The view of traffic and routing that wholesale providers have means that it could be possible for them to provide a service to carriers (their customers) and provide a value add via FMAAS
  • 23. THANK YOU!www.cvidya.com

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