Telecoms fraud still a lucrative criminal business – CFCA

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The Communications Fraud Control Association (CFCA) has reported several interesting findings from their recently released fraud survey. Since 2000, the CFCA has been conducting worldwide, comprehensive fraud loss surveys of the communications industry. After collecting and tabulating the results, CFCA provides this information in its entirety to its members.

There’s no question that fraud continues to be a lucrative criminal business. However, this survey is designed to gather information that goes beyond the simple numbers of fraud incidents and fraud losses. By delving deeper into the data and including a global range of respondents (in terms of geographic location, company size, and service line), CFCA gives carriers an unparalleled ability to analyze the situation in ways not possible by examining the same points across only one carrier, one continent, or one segment of the communications industry.

By comparing the current survey’s results to previous years, historical trends and stark anomalies quickly become apparent. Below are some of the more notable highlights from the 2019 Survey.

  • Compared to 2017, fraud losses as a percent of global telecom revenues grew 37% to $28.3 Billion USD, or 1.74% of total revenues.
  • 45% of fraud departments are less than 7 years old, while 26% have existed for 20+ years.
  • 81% of respondents reported having more than 10 years of telecom experience and more than half of them have been in fraud management for less than 7 years.
  • Although “Lack of perceived interest or understanding by law enforcement” continues to be the leading reason for not reporting cases to law enforcement, 10% reported they stopped reporting due to lack of success on previous cases.
  • A little more than half of all departments update and their fraud management control rules and thresholds once a quarter and more than a third reported that they only adjust them on an ad-hoc, as needed basis.
  • The Top 5 Fraud Methods carriers reported were: Subscription Fraud (Application), Payment Fraud, PBX Hacking, IP PBX Hacking and Wangiri (Call Back Schemes)
  • The Top 5 Fraud Types reported were: International Revenue Share Fraud, Arbitrage, Interconnect Bypass (e.g.: SIM Box), Domestic Premium Rate Service (in country) and Traffic Pumping (includes domestic revenue share schemes)
  • The Top 5 Emerging Fraud Methods reported were: Payment Fraud, IP PBX Fraud, Abuse of network device, or configuration weaknesses, and IOT Fraud.
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