How to Choose a Telecom Anti-Fraud Solution in 2023 By Nadejda Papernaia

In 2021, the global telecom industry suffered a staggering loss of $40 billion due to fraudulent activities. Unfortunately, given its profitability for fraudsters, telecom fraud is not going anywhere in the near future. Consequently, it has become essential for telecom operators and enterprises to employ advanced and comprehensive anti-fraud solutions. Yet, despite the dire circumstances, outdated tools that do not offer sufficient protection are still widely used, resulting in avoidable revenue losses.

As CEO of AB Handshake, with over 20 years of leadership experience in the telecom industry, I would like to share my expertise in current anti-fraud solutions. This guide will focus on 5 approaches to anti-fraud and provide a comparison of their essential features. It should help you better understand what to consider when choosing the tools that safeguard your business. Let’s start by listing the approaches to anti-fraud that are currently on the market.

The 5 main approaches to anti-fraud:

1. Call Validation – AB Handshake’s patented technology. The secure exchange of call details between originating and terminating operators in real time that identifies all known types of fraud with 100% accuracy. If fraud is identified, the call will be blocked before any damage is done. This ensures that operators avoid any losses, and subscribers remain protected. Importantly, Call Validation only happens via a secure out-of-band channel.
2. AI-powered solutions, such as AB Handshake’s AI Shield, employ artificial intelligence and machine learning algorithms to detect and prevent fraud attacks in real time. They monitor live traffic, analyzing hundreds of call parameters to identify fraudulent patterns. Market-leading AI solutions offer detection accuracy of up to 99.92%.
3. Rules-based tools automatically block calls that exceed predetermined high-usage thresholds for specific call parameters, such as duration and the number of calls to high-cost destinations. If these thresholds are exceeded, calls are automatically flagged as potentially fraudulent and blocked. However, these rules require time-consuming manual updates and can’t respond quickly enough to new fraud patterns. According to research by the CFCA, 30% of operators rely on such tools, and 89% of users update their anti-fraud rules only once a week.
4. Databases of risky number ranges - reputable organizations like the GSMA, the CFCA, and commercial service providers offer such databases. The telecom operators manually block these high-risk number ranges, often blocking entire originating (A) and terminating (B) ranges.
5. Hybrid approaches combine multiple methods to balance cost-effectiveness and targeted protection. AB Handshake’s Fraud Radar is an example of this. It doesn’t detect fraud in your traffic, but it alerts you in real time via an API when other operators block and unblock number ranges due to fraud attacks. You can then block the compromised ranges immediately and unblock them as soon as the attack ends, reducing losses to fraud and customer churn.

Comparing the strengths and weaknesses of anti-fraud solutions.

I will now compare the solutions described above based on their essential features. This comparative analysis will help you make an informed choice when choosing the best anti-fraud solution for your business. Please note that this advice is general and may not be tailored to your specific company requirements.

Accurate and granular detection

The anti-fraud solutions must effectively block fraudulent ranges without disrupting legitimate traffic, this is the purpose of granular detection. Blocking genuine calls leads to customer dissatisfaction, trouble tickets, and churn. Therefore, an effective anti-fraud solution should offer maximum detection accuracy, preventing “false positives,” which are legitimate calls mistakenly flagged as fraud. 

Call Validation operates on a call-by-call basis and offers maximum granularity, while having zero false positives. AI solutions are the second-best option due to their self-learning algorithms, which constantly train on new cases to improve their detection accuracy. API alerts offer a high accuracy and granularity of data, due to their use of data gathered by an AI engine. Rule-based systems produce more false-positive results than AI solutions, while fraudulent range databases have the lowest level of granularity as they rely on blocking entire A or B ranges.

The ITU CxO Meeting 2023 resulted in 3 significant statements: Threshold-based rules are generally dated and ineffective against ever-developing voice fraud methods, there are great downsides to the advanced but isolated modern prevention techniques, and importantly, a global real-time validation is required repidly in order to provide a global solution.

View the contents of the ITU's latest communiqué to see how the discussions identify with our approach.

Detection speed

Real-time anti-fraud solutions require two vital features — live traffic monitoring and fast fraud detection. The fastest response time possible is instant, our Call Validation technology is the only one capable of achieving such detection speed. 

AI-based tools offer a quicker response time than rule-based systems for well-disguised attacks. However, since AI relies on behavioral analysis, it has to allow a small percentage of fraudulent traffic through before detecting the fraudulent call pattern. Furthermore, both call validation and AI tools can accurately detect the end of an attack and unblock the ranges automatically to prevent service denial, saving valuable human resources. 

The real-time API approach is also a fast way of receiving alerts about the start and end of fraud attacks on hundreds of networks. The API instantly shares fraud ranges detected by AI.

Signaling level control

It is crucial that the solution is integrated with operators’ network control components on a signaling level. This integration enables the operator to block fraudulent call attempts and break active calls. Fraudulent calls are often designed to last for hours, resulting in exorbitant charges; possessing the ability to break an active call in real time is imperative.

A much less effective alternative integration method is Call Detail Record (CDR) uploads and analysis, which lacks real-time automated responses to fraud and requires manual input of blocking settings. The solutions we discussed can be integrated either on a signaling level or as CDR uploads. I recommend choosing the signaling level integration to enable real-time response to fraud and utilize the tools to their full potential.

Variety in fraud type detection

Fraudsters are constantly developing elaborate fraud schemes that are progressively harder to detect. Therefore, a modern anti-fraud solution should be capable of detecting a broad range of fraud schemes, while also having the ability to discover new suspicious activity.

Call Validation takes the lead here because it’s the only solution that can detect all types of voice fraud in real time. Although AI solutions are powerful, they can’t detect certain types of fraud in real time, such as CLI spoofing, Call stretching, and OTT bypass. Yet they do detect all other major fraud schemes and spot new fraudulent patterns. The real-time API alerts operators about all attacks detected by AI tools, so it also works for a broad  range of fraud schemes.

Rules-based systems rely on the analysis of past cases, so they can’t address new emerging threats and sophisticated schemes quickly enough. Databases are primarily used to block fraud types that target specific high-cost destinations, such as PBX hacking, short stopping, Wangiri and Wangiri 2.0. As a result, databases are only helpful against a limited number of fraud schemes.

Secure installation

As for integration, it’s essential to prioritize secure and non-invasive installment of a solution into your system, to avoid potential vulnerabilities. A good anti-fraud vendor should manage all stages of the integration process and offer both cloud-based and on-site deployment options. 

For instance, Call Validation technology uses an out-of-band channel to exchange information with maximum security. Alternatively, a real-time API like Fraud Radar requires minimal integration effort as it doesn’t need software deployment or manual monitoring.

Efficient investment

Considering the cost-to-performance ratio is, of course, an essential factor in any business decision. While Call Validation and AI-powered tools are generally more expensive than databases and rule-based systems, they’re also more effective; detecting the widest range of fraud in real time. An API solution like Fraud Radar is a more cost-effective alternative, offering access to high-quality live data for granular range blocking. This is how our Fraud Radar solution ensures a lower TCO without compromising protection against fraud.

User-friendly UI

In addition to providing excellent fraud mitigation value, the anti-fraud solution you choose should prioritize your experience as a client. It should have a simple interface that enables easy navigation and customization of call-blocking settings. 

Users should have the option to receive real-time alerts and enable the automatic blocking of fraudulent calls. The solution should also have clear reporting functions that allow for easy dispute resolution. Access to 24/7 customer support is critical for a smooth user experience. Our team strives to ensure that the AB Handshake System provides just that.

Closing Comments

I hope the above anti-fraud solution comparison will help operators and businesses in selecting the best anti-fraud solution for their company type, taking into account specific fraud risks, budget, and other factors.

Addressing fraud has become increasingly crucial, global voice revenues are declining, and competition from OTT calling apps such as WhatsApp and telegram is intensifying. By choosing the best anti-fraud tools, telcos and enterprises can protect their subscribers and revenues, prevent unnecessary losses, and reduce customer churn.

Overall, different approaches to anti-fraud have unique strengths and weaknesses. Ideally, you should use a system that combines various fraud prevention tools and approaches to achieve comprehensive protection against all fraud types. Fortunately, the AB Handshake System of anti-fraud products and solutions, including the newly added Fraud Radar, offers just that.