Fraud management tvass ans


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Telecom sector suffers over $ 50 loss due to fraud. The presentation describes the types of various frauds and the frame work to combat

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Fraud management tvass ans

  1. 1. Telecom FraudLatest Trends and Combating Ahmad Nadeem Syed Director Revenue Assurance & Fraud Management Mobilink 1
  2. 2. 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 2
  3. 3. Fraud Is A Universal TruthTelecom Sector is a FavoritePlayground For Fraudsters 3
  4. 4. How much are Telcos Losing?● Rob Mattison of GRAPA KPMG Survey 2009 estimated the loss upto $40 B No. Major Leakage Areas % Share Network (1%-30%) annually in 2005 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● Juniper research figured out 4 CDR generation issues at MSC and incorrect usage data 8.0 5 Inteligent network charging failure 8.0 the loss at $58b (6%) for year Total Network 55.0 2011 Business & Fraud 6 Retail billing system errors 8.0 7 Interconnect partner payments 7.5 8 VAS partner payments 9.0● According to KPMG Survey 9 Credit Management 7.0 10 Frauds (internal & External) 8.5 2009, bout 45% leakage 11 International Roaming settlements 5.0 pertained to fraud Total Business 45.0 Total 100.0 4
  5. 5. 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) 5
  6. 6. Fraud Types - GSMA Technical SUBSCRIPTION / DISTRIBUTION FRAUD BUSINESS FRAUD PREPAID FRAUD1. Mailbox Hacking (CLI PAYMENT FRAUD 1. Premium Rate 1. Prepaid Services Spoofing) 1. Subscription 1. Dealer Fraud /Audiotext Service Fraud - General2. IMEI Reprogramming Fraud 2. False Agent / Fraud (PRS) 2. Prepaid HLR Profile3. Call Forwarding 2. Proxy Fraud Remote Activation 2. Roaming Fraud Manipulation Fraud 3. Call Selling Fraud 3. International 3. Manual Recharging4. Call Conference 4. Direct Debit Fraud 3. Theft & Handling Revenue Share Fraud 4. Generation of /Multi -Party Calls 5. Credit Cards - Stolen Goods 4. Interconnect Abuse Abusive Credits5. HLR Tampering / Stolen/Compromi 4. Handset Subsidy Loss (GSM Gateways) 5. Scratch Card Abuse Switch Manipulation sed 5. Mail Order Fraud 5. Mobile to fixed6. SIM Card Cloning 6. Credit Cards - network Gateways7. False Base Station Counterfeit Abuse Attack 7. Credit Card-Not- 6. False Answer/False8. Spamming (SMS & IP Present Ring services) Transactions 7. Social Engineering9. Phishing and 8. Cheque Fraud 8. Internal Fraud Pharming 9. Normal Business10. Mobile Malware Fraud & Crime11. GPRS Over-billing 10. Brand Name/Logo12. Voice over IP Fraud Abuse13. PBX Hacking 11. M-Commerce Provider Content Fraud 12. M-Commerce Provider PRS Fraud 13. Content Theft 14. Wangiri 6
  7. 7. New Dimensions Experienced 7
  8. 8. GSM Network/Systems Leakage/Fraud Points Sales and CRM GSM Network Mobile Phone Base Station Core Network Subsystem Subsystem Subsystem On Net Calls HLR AuC EIR PSTN Sales and Distribution System RBS International User SIM + MSC callsTelecom Risk Coverage Hand Set International VLR Gatewy International Roaming User RBS BSC SIM + Hand Set On Net Calls Other Mobile Networks Customer Relation SIM + Hand Set RBS GMSC Management System User SMSC Collection IN Billing Systems Mediation System Platform $ Tariff Voucher Postpaid Management Bills Billing, Charging & Collection System Fraud Rejected Bad events Voucher Debt $ Management Interconnect Invoices Rejected Voucher Bad Management Debt events Rejected Prepaid Leakage Adjustments 8
  9. 9. Opportunity SyndromeFraud 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 9
  10. 10. 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 10
  11. 11. 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 11
  12. 12. 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 12
  13. 13. Collusion Unauthorized International Roaming● Inbound Roaming● Outbound Roaming Defining illegitimate GTs & numbering ranges in host network may be with collusion 13
  14. 14. Combating FraudA Multidimensional Activity 14
  15. 15. Fraud Management Framework Prevention Detection Correction Saved $ 8 M Investigation 15
  16. 16. Combating Fraud 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 16
  17. 17. Combating Fraud Contd… 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 17
  18. 18. Combating Fraud 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 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 18
  19. 19. 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 19
  20. 20. An End to End Reconciliation Concept Air to Cash Reconciliation Model (ATCR) Knowing and Ensuring thatA minute in air is translated into cash in company’s hands Maximum and In Time 20
  21. 21. 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 ATCR 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 21
  22. 22. 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 22
  23. 23. 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 23
  24. 24. 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 24
  25. 25. Ahmad Nadeem 25