Preventing Telecom Fraud & Increasing Revenue Assurance For Operators

They’re used more and more to purchase goods and services online but also for in-store payments. We are facing a transition from cash payments to mobile ones which provides immense benefits, both for end customers thanks to a more rewarding users experience, as well as increased opportunities for revenue generations for operators.

However, due to the desire to own the latest handsets, this is not without its risks for operators due to a lack of affordability when it comes to the latest devices.

Mobile handsets have tripled in value in recent years and are considered highly lucrative by criminals, making the telecommunications industry one of the most vulnerable to fraud and theft, with an estimated 2.9% of operator revenues lost to fraud.

Therefore, telecom fraud prevention and revenue assurance is becoming increasingly important as operators look to guard against theft in porous supply chains and be empowered to offer smartphone subsidies to end users and in turn further increase revenue generation.

Supply Chain Device Theft: A Global Industry Issue

Mobile device supply chain theft and fraud has become a global industry issue, costing $900 per year in the USA alone. In the UK, it is estimated that more than 1,000 mobile devices are stolen on a daily basis. One major cause of concern is that this criminal activity is taking place at each stage of the device lifecycle, throughout the supply chain and even post-sale.

It can occur during the shipment (5-25%) through to in-store theft and robberies. In November 2020, 48 pallets of Apple products worth £5m were stolen from a lorry on the M1 motorway in the United Kingdom and events like this are occurring more frequently. Street crime is also becoming so widespread and serious that, in some countries, people are carrying fake mobile phones to give to thieves, instead of their real ones.

Identity Scam & Security Risks

This huge issue is not affecting only companies’ revenues, but also customer privacy and data protection. Since people are using their mobile phones more and more for all their activities, including payments and financial transactions, they tend to store highly-sensitive personal information on their devices. These include bank details, email accounts, apps, photos, videos, messages and a variety of other private and sensitive information. Therefore, the opportunities available for fraudsters to gain access to this sensitive data, and the consequences of it, can have devastating repercussions.

Fraudulent Behaviours With Smartphone Subsidies

Mobile operators are facing an additional issue caused by those who are not paying their device instalments, even though they have signed a contract. Large numbers of operators around the world are investing millions in smartphone subsidies in anticipation that this investment will pay off over time.

An increasing number of people are taking advantages of this opportunity, which reduces the upfront cost of the smartphone, but lots of fraudulent behaviours are occurring and mobile operators are struggling to protect against misuse. This is especially the case in countries and regions where smartphone affordability is an issue and is impacting operator’s revenues.

In order to increase their average revenue per user, operators need to ensure that end users have the latest smartphone technology to consume richer content, and in turn, consume greater amounts of data and purchase in-app content and services.

How To Eradicate Fraud And Guarantee Mobile Security And Protection

The growth in device theft and fraud means that mobile operators have to start considering and investing in solutions to assist in telecom fraud prevention. Today they’re utilising a variety of tools to prevent these fraudulent actions, but the level of protection remains porous and needs to be addressed. There are some methods that only help once the device is registered to a consumer, leaving the mobile phone vulnerable up to that point, or solutions that are too expensive to manage and maintain a long-term and global basis.

The best method to overcome these issues would be to utilise a comprehensive solution that addresses all the possible issues, reducing the risks of missed customer payments, fraud and theft. Modern technologies enable operators to mobile device retailers to communicate directly with smartphones, helping to act quickly when fraudulent activities are detected.

Communication with the customer is also encouraged, to remind them to pay their bills or their handset will be locked if they don’t make outstanding payments. When a device is stolen, it’s possible to fully lock it down and make it unusable and remove any resale value.

All of the mobile operators around the world should take this approach into consideration in order to discourage mobile phone theft and fraud and to maximise profits and aid long-term customer retention.