Telecom Fraud Costs Reach €29 Billion
This report highlights that telecom fraud is becoming a low-risk alternative to traditional financial crime. The reduced cost and increased availability of hacking equipment mean this type of fraud is on the rise. The cost of telecommunications fraud is estimated to be €29 billion a year.
At its heart, this fraud is the abuse of telecommunications products (mainly telephones and mobile phones) or services with the intention of illegally acquiring money from a communication service provider or its customers.
The main goal of criminals is to gain access to customers’ or carriers’ accounts, where debt can be incurred in the criminal’s favor.
The most common methods can be broken into different categories, ranging from crude to highly sophisticated scams:
- Vishing calls. Vishing (a combination of the words Voice and Phishing) is a phone scam in which fraudsters trick victims into divulging their personal, financial or security information or into transferring money to them.
- One (ring) and cut or Wangiri -Japanese for ‘one ring and drop the call’ – is a telephone scam where criminals trick victims into calling premium rate numbers. A fraudster will set up a system to dial a large number of random phone numbers. Each call rings just once then hangs up, leaving a missed call on the recipients’ phones. Users often see the missed call and, believing it to be legitimate, call the premium rate number back.
- International Revenue Sharing Fraud (IRSF) has been the most damaging fraud scheme to date. It involves transferring monetary value from one carrier to another based on the inter-carrier trust between telecom operators. Patient fraudsters wait for the logs to expire before executing any further money laundering steps.
‘Telecommunications fraud is another example of criminals “hacking the system” in order to abuse legitimate enterprises for criminal gain,’ said Steven Wilson, Head of Europol’s European Cybercrime Centre, ‘While this is not a new crime area, it does represent a new challenge for many law enforcement agencies throughout the European Union.’ telecom fraud