The document discusses revenue assurance and fraud management in the telecom industry. It outlines various points in the service cycle where revenue leakage and fraud opportunities can occur, including developing and pricing products, network infrastructure, service provisioning, rating and billing, collections, and revenue reporting. Examples of past corporate frauds like Enron and Worldcom are provided as warnings. Prevention techniques for common frauds are also suggested.

1. Revenue Assurance – Punctured profits & Fraud Management Presentation by Anil Kumar

2. What impacts profits? Shrinking of the Top Line – loss of revenues Increase in Cost lines Impact = A Hole in the company’s profits

3. Examples….. Enron, Worldcom and many more Impact…… collapse of organisations Also collapse of Audit & Consulting firm Impact = A Big Hole in the company’s profits Investors losing their money, people rendered jobless

4. Cycle of Telecom Services Develop and price products Manage Network Infrastructure Manage receivables and fraud Rate and Bill Provide service Manage customer & carrier relations Sell products Market products Account and report

5. Revenue Leakage Possibilities Developing and pricing of Products Launch of products without adequate testing in a hurry to launch first e.g VAS. Launch products without technology support to ensure there is no revenue leakage. Tariff changes at short notice to counter competition.

6. Revenue Risk Opportunities Selling of Products Sales without adequate verification of customers. Re entry of fraudulent customers. Fictitious activations/sales to earn more commissions. Provision of services without corresponding checks and balances to prevent high exposures.

7. Revenue Risk Opportunities Network infrastructure Inadequate capacity deployment of sites at high contribution areas like roaming. Inaccurate usage capturing. Inadequate control over switch databases Inadequate controls over provisioning Fraudulent usage of test SIMS/phones

8. Fraud Opportunities Manage Carrier Relations Roaming frauds Carrier contracts and billing

9. Fraud Opportunities Service Provisioning Launch of new products/Value added services Inadequate controls over SIMS and recharge coupon pins. Recharging frauds.

10. Revenue Risk Opportunities Rating and Billing Inaccurate configuration of tariff tables. Inadequate Controls over Bill plan changes Weak Controls over free airtime connections Inadequate Controls over rating of CDRs Weak Controls over bill generation Controls over customer files/balances International Long distance grey calling.

11. Collection Fraud possibilities Manage Receivables Credit limit fixation Non-adherence to credit policy Non monitoring of high usage Cash management through Collection agencies Payments through credit cards Non allocation of cases to collection agencies. Non Barring of services to defaulting customers.

12. Revenue Reporting Risks Account & Report Improper subscriber nos. reporting Inflating revenue figures Under-reporting of bad debts

13. Risks to Costlines Payments for leased lines not in use. Deployment of network elements with inadequate utilization. Inadequate controls over energy costs. Inadequate verification of Interconnect charges payable to other operators. Overcharging by content providers and call center agencies.

14. Fraud Opportunities Account & Report Improper subscriber nos. reporting Inflating revenue figures Under-reporting of bad debts

15. Fraud illustrations Non rating of “Zero Duration Calls” Non configuration of certain destinations in the IN platform Subscribers not billed for considerable period of time Free airtime given to distributors/subscribers without adequate authority Unauthorised bill plan changes Configuration checks Rejected call analysis. Reconciliation of active customers vs. billed Regular review of FAT connections. Control log for bill plan changes Area of Risk Prevention techniques

16. Fraud illustrations Activating roaming with call conferencing facility without proper credit verification Leakage of information regarding prepaid customer database to the competitors 1. Keeping activation of VAS as centralised. 2. No VAS activation without credit verification. 1. Stringent IT controls over data copying, mailing & printing 2. Confidentiality clause with outsourced agencies Area of Risk Prevention Techniques

17. Fraud illustrations – NLD/ILD High termination charges in the case of Sex lines paid by the ILD operators for traffic on international lines. e.g. Deigo Garcia. Call routing Specific clauses in the agreement. Regular monitoring of high traffic to few numbers. Review of Least call routes and data analysis of call carrying. Area of Risk Prevention Techniques

18. How frequently are the IT security compliance results measured by your organisation? Source: KPMG India Fraud Survey Report 2006

19. How was it detected? Source: KPMG India Fraud Survey Report 2006

20. In which of these areas did the majority of Rupee losses occur? Source: KPMG India Fraud Survey Report 2006

21. What is the medium available to employees to report wrongdoing in the organisation? Source: KPMG India Fraud Survey Report 2006

22. QUESTIONS ?

23. THANK YOU