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Wangiri Fraud Prevention and Detection: How to Protect Your Customers from Callback Scams

14 min. read

You receive a missed call from an unknown number that rings once and stops. Curious, you decide to call back, only to be greeted by an audio recording before a quick hang-up. You have unknowingly just fallen victim to the Wangiri scam. It may seem insignificant, but the charge for this call on your phone bill will likely be enormous.

This stealthy fraud scheme, generally known as Wangiri fraud, poses a significant threat to end-users and businesses alike. 

Even a small percentage of callbacks leads to billions of dollars of losses for unsuspecting end-users annually. It damages customer relationships, strains operator circuits, and causes irreparable churn for businesses.

This article aims to explore Wangiri fraud and the role of cross-validation technology in preventing it. Additionally, we will explore how telecom market players work to detect and prevent this type of fraud. By the end of this article, you will have a better understanding of Wangiri fraud and the collective efforts undertaken to mitigate its impact.

What is Wangiri Fraud? 

Wangiri, derived from the Japanese "one ring and drop," is a specific type of International Revenue Share Fraud (IRSF). It operates through the manipulation of international premium-rate numbers (IPRNs) or expensive destinations. Fraudsters generate profits by artificially increasing traffic to these numbers by executing one-ring calls to unsuspecting subscribers, enticing them to return the missed call, which leads to huge charges.

The individuals organizing one-ring scam calls incur minimal expenses, as most of these calls are dropped before the target subscriber can answer. However, even a relatively small percentage of successful callbacks can result in hundreds of thousands of "missed calls" to customers of one or more mobile operators in a single day.

Wangiri fraud is not confined to a specific region or country; it’s a global phenomenon. Fraudsters exploit the interconnected nature of telecommunications networks to execute these scams on a massive scale. Wealthier countries, such as the USA and Canada, often bear a substantial portion of the financial losses resulting from this fraudulent activity.

Two “legs” of Wangiri Fraud

Wangiri involves two interconnected components, or "legs," collaborating to deceive victims. The first leg revolves around generating "missed calls" through methods like the one-ring-and-cut scam or dial-and-drop fraud. The second leg involves manipulating the subsequent "callbacks" made by unsuspecting victims, exploiting them through callback scams. 

To gain a deeper understanding of Wangiri fraud, it is important to explore the three tactics commonly used by scammers in this deceptive scheme. By examining these tactics, we can illuminate why traditional fraud management systems fail to detect and block Wangiri fraud effectively.

How Wangiri Works: Three Wangiri Fraud Tactics Explained 

Corrupt Owner of a Premium Rate Number

In this tactic, the fraudulent party, known as the owner of an IPRN, initiates a large volume of one-ring scam calls, often reaching up to 300,000 calls a day, using their number capacity. These calls target hundreds of thousands of subscribers across one or more mobile operators.

Some recipients, curious about the missed call, decide to call back the premium rate number. Upon calling back, they encounter an audio recording, automated menu, or other distractions designed to prolong the call and accumulate charges. After a brief period, the caller eventually hangs up.

Tracking this first component of the fraud is particularly challenging because there is no chargeable duration associated with the initial missed call. Additionally, the terminating operator, responsible for handling the call, lacks sufficient information to assess the number’s risk level. This makes the decision on whether to block the number or not a difficult task.
In the second “leg” of the scam, individuals who received the missed call attempt to call back the number. However, they are connected to a premium rate number that plays a mysterious recording or message.

When a wholesale carrier detects suspicious call patterns, they might choose to block the call from reaching the fraudulent number range. However, in many cases, carriers opt to overflow the calls to another wholesale operator to ensure successful connections.

Ultimately, the corrupt owner of the premium rate number successfully generates an artificial boost in traffic to their service, consequently increasing their revenue through deceptive means.

Fraudulent Carriers Collaborate to Reroute Calls

A corrupt transit operator conspires with a fraudster to commit a one-ring scam. The fraudster initiates the generation of "missed calls" using the A-number of an expensive destination or an International Premium Rate Number (IPRN). The collaborating transit operator intercepts callback traffic and redirects it to a fraudulent terminating operator, who may even connect calls to real individuals in a call center. The ultimate goal remains consistent: keep callers connected for as long as possible to accumulate charges.

Subsequently, the ill-gotten gains are divided between the fraudsters involved.

In this scenario, the fraud occurs in the second leg, where the callback takes place, involving the collaboration of corrupt transit and terminating operators.

In the current telecom landscape, individual operator networks, even those with fraud management systems, operate independently, lacking communication and coordination between networks. This integration gap makes it challenging to identify call hijacking at any point in the call chain.

This dilemma represents both the problem and the solution for effectively combating Wangiri callback fraud. Tackling Wangiri fraud requires the combined efforts of several operators, as no single operator can tackle it alone. Accurate detection requires communication and cooperation between operators, which we will explore in greater detail later in this article.

Wangiri 2.0

In recent years, a new variation of the unknown caller scam, closely resembling Wangiri fraud, has emerged. However, this scheme differs in its targeted victims: instead of telecom companies and their customers falling victim, enterprises, particularly their call centers, are the primary targets. This variant is known as "Wangiri 2.0".
In a Wangiri 2.0 attack, bots are employed to generate callbacks by submitting phone numbers to numerous online business contact request forms. The callback traffic, originating from the call centers of these businesses, is then manipulated using similar tactics to those used in the previous two schemes.

Businesses often mistake this increased traffic as a natural surge in contact requests, unaware they are being deceived into expanding their marketing budget on fraudulent calls.

These three schemes represent the primary methods used by Wangiri scammers. Notably, the initial impact of these attacks tends to affect subscribers in affluent nations.

Combatting Wangiri Fraud: Understanding its Nature and Implementing Effective Detection and Prevention Strategies

To detect and prevent Wangiri fraud effectively, it’s important to understand the nature and underlying causes. In this section, we cover the factors contributing to Wangiri fraud and offer effective strategies for combating it.

Global Impact of Wangiri Scams: Identifying the Most Affected Regions

Wangiri scams primarily affect customers in wealthy regions like North America, Europe, and the Middle East.

The US and Canada are particularly vulnerable to these scams. Scammers manipulate the North American Numbering Plan (NANP) to target customers more effectively.

A common Wangiri scam tactic involves tricking US and Canadian customers with NANP A-numbers registered to Caribbean countries. Victims then answer the calls, believing they are coming from the US, with costs covered by their mobile phone plans. In reality, they are paying for an international call.

Industry experts have developed tools to mitigate these tactics. However, existing solutions face challenges in completely and accurately blocking such scams.

Additionally, surges of scam calls common in North America and Europe are also spreading to the Middle East.

Comprehensively addressing this issue is crucial to protect customers and reduce the global financial impact of Wangiri scams.

Limitations of Traditional Anti-Fraud Approaches

Wangiri scams continue to pose a significant challenge for traditional fraud detection and prevention systems. They are considered among the most dangerous fraudulent schemes, proving difficult for conventional solutions to identify and stop effectively.

Operators have attempted to combat one-ring scams by creating blocklists, which include known International Premium Rate Number (IPRN) ranges and other number ranges associated with this fraudulent scheme. The aim is to block incoming one-ring calls from these numbers and prevent outgoing calls to them. However, fraudsters consistently acquire new number ranges, rendering these blocklists quickly outdated and ineffective.

Many experts have shifted their attention to AI-based fraud management systems, training them to recognize Wangiri patterns better. However, two fundamental issues persist:

  • The fragmented nature of the global telecommunications service;
  • The isolated and reactive approach operators use to protect their networks.

These two issues present significant opportunities for Wangiri fraudsters, allowing them to generate a substantial volume of missed calls from unidentified numbers, exploit callbacks, and illicitly acquire billions of dollars annually. Now, let's explore these issues in greater detail.

Fragmentation

The telecoms industry’s inherent fragmentation creates multiple entry points for fraudsters within the call chain. This fragmentation poses challenges for effectively combating telecom fraud, necessitating the development of a fraud vaccine, similar to how we tackle viral pandemics.

In the context of Wangiri scams, many callbacks involve multiple network operators. A single voice call can originate on one cellular network and terminate on a different fixed-line network, involving separate providers. More complex call sessions are also common. For example, a call may initiate from a cell phone outside of the USA, traverse the globe through one or several long-distance networks provided by different telecom operators, and finally terminate on another mobile network within the USA. Each component of the call chain can serve as an entry point for fraudsters to exploit.

Another aspect of this problem is the isolation in which operators typically operate.

Isolation and Reactive Approach

The traditional approach to combating callback phone scams and other fraud schemes has historically been inward-focused and reactive. Experts have developed advanced fraud management systems, incorporating technologies like digital signatures, in-band SIP signaling, and artificial intelligence to create protective barriers around their networks. However, this approach often neglects activities along other segments of the call chain, resulting in significant costs.

The lack of real-time communication and visibility between operators regarding the state of the call chain allows abuses to go unnoticed. Operators can only detect and prevent a portion of Wangiri fraud attacks, and their response is typically reactive, addressing attacks after they have occurred and adjusting their protocols to stop similar future Wangiri fraud attacks.

Consequently, a perpetual cat-and-mouse game ensues between fraudsters and operators, with fraudsters consistently staying one step ahead, maintaining their presence in the market, and successfully siphoning billions of dollars from end-users annually.

For context, the losses incurred due to these fraudulent activities amount to significant sums in USD.

Global Loss to Wangiri Fraud in USD

According to CFCA global fraud loss surveys:

While our ultimate goal is to detect and prevent Wangiri fraud completely, recent statistics indicate that Wangiri scams have been on the rise in Wangiri scams over the past few years. Furthermore, the COVID-19 pandemic has somewhat amplified revenue losses due to telecom fraud.

The impact of Wangiri fraud extends beyond financial loss. It causes significant reputational damage and logistical challenges for carriers.

Negative Consequences of Wangiri Calls

The damage caused by Wangiri extends beyond financial loss. This scheme inflicts devastating reputational losses on carriers and creates crippling logistical challenges.

Financial and Reputational Loss

Firstly, hundreds of thousands of users in North America, Europe, and the Middle East face enormous phone bills from each successful attack, leading to disputes with their mobile carriers. Some victims unknowingly call legitimate numbers, while in other cases, corrupt transit carriers invisibly hijack their calls. This makes it extremely challenging for mobile carriers to resolve disputes effectively. They face a dilemma: refund the costs or risk customer churn.

Carriers cannot detect suspicious calls with 100% certainty. This presents another dilemma for them. They must choose between allowing outgoing international calls to proceed for potential profits or denying them and risking negative customer experiences.

Many in the industry wonder how operators can better protect themselves and their customers. Should these countries simply accept these losses as an unavoidable cost? 
Despite the sophisticated tactics used by Wangiri scammers to avoid detection, there is one common factor in all calls made across any network at any time: call details. It is through these call details that we can confidently and accurately detect and stop 100% of all Wangiri scams with absolute confidence and zero false positives.

Let's consider this concept further.

Cross-validation - How to Prevent Wangiri Calls and Protect Your Customers

To effectively address the issue of Wangiri or one-ring calls and ensure customer protection, it’s crucial to tackle the fragmentation problem in the telecommunications industry. This can be achieved through industry-wide collaboration, enabling operators to communicate and cross-validate call details in real-time during call setup.

By implementing such a solution, operators can accurately detect any manipulation or fraudulent activity at any point along the call chain, ensuring a 100% accurate detection rate and effectively stopping one-ring scams before they can connect. This is the fundamental principle behind the AB Handshake solution.
AB Handshake’s product operates by cross-validating the call details from both the A and B call registries of a call, providing a guaranteed method for operators to prevent Wangiri fraud and protect their customers.

Here's how it works:

  1. When a call is initiated, the originating network records essential call details in Call Registry A. These details include the A and B numbers, along with a time-stamp indicating the call's start.
  2. Simultaneously, the terminating network sends their corresponding call details to Call Registry B.
  3. Both registries exchange encrypted messages via the Internet to cross-validate the call details.

In the case of one-ring scams, where fraudsters manipulate the caller ID (CLI) or collaborate with fraudulent carriers to hijack calls, a discrepancy will emerge between the A and B call registries, resulting in the prompt blocking of such calls.

Call validation was a primary point of discussion at the ITU CxO meeting 2023. Unanimously, the industry leaders in attendance concluded that, to manage fraud responsibly, a global solution was required. The implementation of real-time call validation is crucial. Thankfully, AB Handshake Call Validation answers the call. The committee noted that, unlike ineffective threshold-based rules and often isolated alternative methods, call validation offers a collaborative solution.

For a comprehensive overview of the discussions from the ITU CxO meeting 2023, view the communiqué.

AB Handshake: How to Stop Wangiri Fraud Calls for Good

Going further, AB Handshake leverages the power of AI to detect and prevent Wangiri fraud. 

Recognizing the importance of real-time precise blocking, we developed an advanced artificial intelligence (AI) module powered by machine learning algorithms. This module uses the collective intelligence of more than 160 subscribers worldwide to detect attacks before they reach end users.

The AB Handshake solution is based on AI Shield, an artificial intelligence unit powered by machine learning. With over 200 parameters for traffic analysis, it detects the smallest discrepancies in call patterns and blocks fraudulent calls in real time. AI Shield ensures the highest standard of protection for service providers and end-users, detecting and blocking Wangiri calls with 99.995% accuracy. 

The tool is fully automated and pre-trained on extensive wholesale and retail traffic data, ensuring optimal performance from day one.

For service providers unable or unwilling to block outgoing calls, AB Handshake offers IVR functionality. When a user attempts to place a callback to a number used for a Wangiri attack, a pre-recorded warning message is played to ensure the end user understands and takes responsibility for dialing a high-risk number.

For more details on AI Shield, visit our page or get in touch to book a meeting with our team.

With the implementation of AB Handshake’s anti-fraud solutions, operators in heavily affected regions like the USA, Canada, Europe, and the Middle East can transition from a reactive approach of chasing fraudsters to a proactive stance of eliminating Wangiri fraud before it causes harm.

Creating a Fraud-Free Community - How to Stop Wangiri Calls

With AB Handshake solutions, all monitored operator traffic is guaranteed to be free from Wangiri and any other voice fraud type, ensuring near 100% accuracy and zero false positives.

As more operators embrace AB Handshake, the community expands, leading to a larger portion of fraud-free traffic and a diminishing share of fraudulent activity. The global adoption of AB Handshake has the potential to completely eliminate all Wangiri attacks, ultimately leaving fraudsters with no viable options.

Seamless and Affordable Integration

AB Handshake is a user-friendly, easily integrated, cost-effective solution suitable for operators worldwide. Unlike traditional fraud management systems that rely on signature-driven, in-band, and SIP signaling technology, AB Handshake's no-nonsense, out-of-band foundation is key to its success.

Traditionally, FMS integration stages are time-consuming and costly. However, integrating AB Handshake can be accomplished in as little as one week, significantly reducing integration costs.

The onboarding process is simple, with specialists assisting in AB Handshake software installation on a dedicated server and configuring it to work seamlessly with the operator's existing network equipment. Once set up, the system is ready for use.

Operators have the flexibility to customize their personal security policy rules for both inbound and outbound voice traffic. Once activated, operators can monitor the entire validation process through an online interface that offers transparency and provides a comprehensive view of all system activities.

Partner with AB Handshake Today

Operators in the USA, Canada, Europe, and the Middle East can now effectively protect their businesses and subscribers from Wangiri fraud. Finally, businesses are experiencing relief from the relentless financial, reputational, and logistical burdens caused by these one-ring phone scams.

The AB Handshake community collaborates with 160+ operators at various integration stages, including negotiation, contract signing, and onboarding.

We actively welcome providers from around the world, and our solution is already successfully validating live traffic in every country.

If you're interested in joining the AB Handshake community or have questions, please contact us here. One of our onboarding specialists will promptly assist you.

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