Roaming – the most costly type of fraud

Roaming – the most costly type of fraud

by Dilip Mistry

According to the Communications Fraud Control Association’s (CFCA) most recent fraud loss survey one of the most common types of fraud reported by operators, accounting for $6.11 Billion (USD) losses, is roaming fraud.

Whether inbound, where calls are received on a different network than the home network, or outbound which is the exact opposite, the average roaming fraud incident is valued at between $750,000 and $1.93M for large operators, but has been recorded to reach levels as high as $15m USD.

Roaming fraud is relatively simple to achieve, where the subscriber claims ignorance, insufficient knowledge of the level of cost associated with roaming, or claims the service was never requested. The reality is the subscriber has obtained a mobile line with the intent of using it to roam and simply refuses to settle the bill. This simple fraud, perpetrated by subscribers is particularly common.

But most damaging for operators are the losses from organised subscription fraud which adds other frauds, especially identity fraud into the mix. After obtaining a roaming activated post-paid SIM card using forged or false documents, fraudsters take the SIM to a visited network where it is used to make long outgoing calls to local call forwarding services or to premium numbers which the fraudsters may own. With such excessive usage an alarm will be raised with the home network provider and the SIM will be blocked or disconnected. This process however is not instantaneous as the visited network needs to provide the call and billing data to the home network. The worse the relationship between operators the longer this can take and the greater the opportunity for the fraudsters to generate illegal funds.

As always it is the network operator that will shoulder the burden of the cost, which will be passed on to users in higher call, message or data costs, often directly to roamers.