Feeds

Call routing scam costs telcos $150m a year

Victims often unaware of complex phone swindle

3 Big data security analytics techniques

Fraudulent call termination is costing operators huge amounts of money, though the victims are often unaware they've been tricked.

The elaborate scam involves routing international calls onto local numbers, then using promotional offers offered by local telcos to connect the call without handing over the termination fee. UK outfit Revector, which has detected this swindle in 50 countries over the past two years, puts the revenue loss at $150m annually and points to one European operator who was losing more than a million dollars a month.

To understand how such a fraud works, it's worth taking an example: imagine a Vodafone customer in the UK is calling a friend in Haiti, who is on Digicel Haiti. In the normal course of things, Vodafone pays a termination rate to the Haitian operator for every minute of conversation, helping to fund that operator.

However, Vodafone doesn't deal directly with every operator around the world; numerous call-handling companies pitch their rates to companies such as Vodafone who work on the assumption that Digicel will get their cut.

For the sake of our example let's assume that Vodafone slips up and signs a call-routing deal with a Scams 'R Us. Scams 'R Us gets a whole lot of local SIM cards for Digicel Haiti, which allow free calls to other Digicel subscribers. Those SIMs get dropped into a box that can route incoming calls out again, and Digicel thinks they're local connections so collects no termination fee.

Vodafone, on the other hand, pays the fee in good faith, which is how Scams 'R Us makes its money. The callers get a lower-quality connection than they hoped for, but probably won't notice, especially if Scams 'R Us can bodge the caller ID (sometimes possible, depending on the receiving network).

The same thing applies the other way, of course, and with intra-operator calls so often being free these days the incentive only increases.

On the global scale of things the amount of money isn't huge, but the scam is indicative of how complicated international telecommunications is these days, and a reminder that the inventiveness of the scammer should never be underestimated. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Virgin Media so, so SORRY for turning spam fire-hose on its punters
Hundreds of emails flood inboxes thanks to gaffe
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
AT&T dangles gigabit broadband plans over 100 US cities
So soon after a mulled Google Fiber expansion, fancy that
AT&T threatens to pull out of FCC wireless auctions over purchase limits
Company wants ability to buy more spectrum space in auction
Google looks to LTE and Wi-Fi to help it lube YouTube tubes
Bandwidth hogger needs tube embiggenment if it's to succeed
Turnbull gave NBN Co NO RULES to plan blackspot upgrades
NBN Co faces huge future Telstra bills and reduces fibre footprint
NBN Co plans fibre-to-the-basement blitz to beat cherry-pickers
Heading off at the pass operation given same priority as blackspot fixing
NBN Co in 'broadband kit we tested worked' STUNNER
Announcement of VDSL trial is not proof of concept for fibre-to-the-node
prev story

Whitepapers

Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.