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Spam Calls: Rising threat for low-rate destinations - Are you vulnerable?

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how to block spam calls
Many people used to answer any call they received on their phone, regardless of whether they recognized the number or not. Before our contact lists, people would often dial numbers incorrectly and reach the wrong person. Occasionally, a telemarketer would call.

Today, with the threat of spam calls, answering an unknown number can have a range of consequences - from a robot merely wasting your time to serious financial loss to end-users, businesses and telcos.

In fact, the CFCA estimated the total global telecom revenue lost to robocalls and phishing scams (Spam calls) in 2021 at $3.24B.

Regulators have tried to stop it, even implementing daunting fines reaching hundreds of millions of dollars to deter spam organizations. However, these fraudsters turned their aim to end-users in foreign countries to avoid tracebacks and detection.

Today, countries around the world with low termination rates are vulnerable. Many operators and end-users in these countries face a barrage of spam calls daily.

While traditional fraud management systems struggle to prevent spam calls from abroad, call validation technology offers a solution.

To understand how to stop this fraud scheme, we need to first outline what a spam call is and how these fraudsters operate.

Fraud Has a Regional Face - Spam Calls

This is the fourth installment in our Regional Fraud series. By the end of this article, you'll know:

  • What exactly is a Spam call
  • Which countries it targets
  • Why this fraud scheme is on the rise
  • The damage it inflicts on end-users, businesses and telcos
  • How we can stop it
Let's begin.

What is a Spam Call?

What is a spam call? Here is a definition of a spam call:
A spam call is an unsolicited call from any business directly to your mobile or home phone.
Scams affiliated with these calls include IRS imposter calls, calls that pretend to be from Apple or other large companies, false COVID-hardship programs, fake refunds from Amazon, and more.

The losses to telcos and end-users are enormous. As we mentioned above, the total global telecom revenue lost to robocalls and phishing scams (Scam calls) climbed from $2.1B in 2019 to $3.24B in 2021. That's a 54% rise in two years.

Some companies use spam calls to sell legitimate products and services. However, even these businesses can be acting unethically.

If a user opts in to receive marketing calls from a business, the business has a right to call this person. If a user doesn't opt-in for marketing calls and messages, a business might call this person anyway. As it turns out, phone call marketing is highly effective. Especially in countries where the call is comparatively cheap for the business.

The effectiveness of phone call marketing is one reason Spam calls are on the rise.

Scam Calls on the Rise - Phone call marketing is profitable for spam callers

According to estimates, the volume of spam calls received in the US rose 26% from 2020 to 2021.

As shopping and daily communication shift to the world of mobile phone apps, businesses are bringing their communication to these channels as well - their customers are already there.

Phone call, SMS and email marketing have become a key part of a business' marketing strategy. They have become an essential means of support for customers along the entire customer journey. They provide promotional messages, information, support, and verification.

And fraudsters have given a natural response. They've increased the volume of phone call marketing scams to turn major profits.

Losses to businesses and telcos continue to rise, each year.

Losses Due to Spam Calls

Spam calls continue to inflict revenue losses on a scale depicted by the above numbers. And according to First Orion, there was a 118% increase in scam calls in the USA from 2020 to 2021.

However, the damage extends beyond financial loss.

Business' Calls Go Unanswered

Amidst the threat of spam calls and Wangiri callback fraud, end-users have become increasingly distrusting of any call from an unknown number.

In 2020, the PEW Research Center discovered that eight out of ten Americans don't generally answer phone calls from unknown numbers. The FCC even recommends that people don't answer calls from unknown numbers.

At the same time, not all unknown numbers are from spammers. But because of consumer skepticism, many legitimate calls from businesses to customers simply go unanswered. This leads to disrupted customer relations, churn, and revenue loss.

Meanwhile, operators waste valuable resources.

Operators Waste Resources Routing Spam Calls

Operators waste immense resources routing and processing billions of these illegitimate calls each month.

Many of them feel like spam calling is getting worse. The above data confirms these suspicions and viable solutions to mitigate the problem have been slow coming.

Attempts to stop these spammers haven't been hopeless, however. The scale of the problem has sparked reactions from many regulators.

Regulators Response to Spam Call Problem

An increasing number of private developers, analysts, and government bodies are noticing the problem, sharing what data they have on the issue and taking action.

Response From US Regulators

Unwanted calls are the Federal Communications Commission's (FCC) top consumer complaint and their top consumer protection priority.

The FCC implemented the STIR/SHAKEN protocol in 2020, mandating operators to either install the solution into their local systems by late 2021 to mitigate robocalls and CLI Spoofing (both key tactics of Spam call operations).

They created the Robocall Mitigation Database for international providers to make tracebacks more effective.

In March of 2021, the FCC also announced that it had formed a "Robocall Response Team" consisting of 51 FCC employees who would coordinate anti-robocall efforts.

Response From European Regulators

The European Conference of Postal and Telecommunications (CEPT) examines the current regulatory practices in various jurisdictions and various technical methods to combat fraud. In its most recent report about combatting CLI Spoofing, a major tactic for spam callers, it proposed a multi-staged approach to implementing selected solutions for fraud.

The AB Handshake call validation system stood out as one of the solutions in the report.

The Australian Communications and Media Authority (ACMA) recently implemented rules to detect and prevent scam calls. The result is the Reducing Scam Calls Code, created by members of the Australian telco industry.

The Commission for Communications Regulation (ComReg) in Ireland recently established a task force to address the rising number of scam calls and texts targeting end-users trying to obtain their personal details.

Every national regulator has anti-spam regulations that cover not only e-mail spamming, but also SMS and calls. In the US, the FCC has laid down huge fines as part of expanded efforts to reduce automated sales calls.

Cost of Spam Calls in the US

In early 2021, the FCC fined two Texas-based telemarketers $225 million for automated robocalls made in 2019.

Under the business names Rising Eagle and JSquared Telecom, the marketers used illegally spoofed robocalls to sell short-term health insurance plans. Their campaign generated a total of about one billion robocalls.

It was the largest fine in the commission's history.

Most of these efforts have eliminated a significant portion of Spam calls originating locally. Anti-fraud systems and other strategies developed by developers and government agencies can successfully perform tracebacks to identify local spammers and stop them.

However, the fraudsters moved abroad. More specifically, they moved to target end-users in foreign countries. They circumvent tracebacks and new detection software, thus perpetuating the game of cat and mouse between themselves and regulators.

Today's Spam Call Threat - From abroad

Efforts to control Spam calls have been slowed by CLI Spoofing. This fraud scheme allows scammers to fake local phone numbers. A business model where only a very small number of victims need to be scammed for the robocaller to profit is also responsible for the spammers' thriving business.

But the biggest step fraudsters have taken to avoid detection is targeting end-users in foreign countries.

The FCC is now trying to force the gateway providers to block robocalls. But, so far, it's been almost impossible for regulators to stop spam calls from abroad. This has been a primary factor in the rise and success of Spam calling in recent years.

Spammers Avoid Detection by Targeting Foreign Countries

As a result of fraudsters targeting end-users abroad, countries with low termination rates suffer severely from this fraud scheme. Spammers won't invest in spam call campaigns to countries where termination rates are high - they simply won't be able to cover campaign expenses.

The US termination rate is around $0.002/min, so the majority of robocalls to the US come from abroad at almost zero cost.

In Europe, a huge number of spam calls arrive from A-numbers belonging to different EU countries (inter-European international termination rates are about as low as termination rates for the US).

Spammers any country or region with low termination rates, including the USA, Canada and Europe.

Regulators simply lack the means to shut down these calls. While the situation seems hopeless, call-validation technology offers a solution.

Call validation is a technology developed by the AB Handshake corporation that can effectively stop 100% of all spam calls, regardless of the originating location of the call.

To understand how it works, let's first outline the problems traditional fraud management systems have stopping spam calls from abroad.

Shortcomings of Traditional Fraud Management Systems

Regulators have tried to solve the Spam call problem by protecting operators in isolated jurisdictions. Operators also attempt to insulate their network from attacks without sharing information between one another nor considering what's happening at other points in the call chain.

It hasn't worked. Fraudsters are located all over the world and can route calls through almost any location. A call may begin from a mobile phone in one country, then transit the globe via a long-distance network or several networks provided by other telecom operators before terminating on yet another mobile network in another country.

A spammer can enter the call chain at any one of these connection points, even cooperate with a fraudulent carrier, spoof the CLI of the A-number, and target local residents of a foreign country. Their scam calls appear to be from a local number. No party in the call chain will ever know exactly what happened, or where it started.

Without transparency and the ability for international tracebacks there are other problems. If a Spam call originates from a legitimate, unspoofed number, the originator of the call can simply claim it was someone else using a spoofed CLI.

Global Cooperation is Necessary

Transparency and communication between operators around the globe via a lean, out-of-band real-time channel that can validate calls before they connect eliminate each of these problems.

This is the principle on which AB Handshake's call validation solution operates.

AB Handshake Solution - Stop all spam calls

AB Handshake establishes a means of communication between operators located anywhere on the globe. They can cross-validate call details of the A and B call registries of calls made on their networks in real-time to detect any form of manipulation.

Here's how it works:

  1. As soon as a call is initiated, the originating network records key call details to Call Registry A. Details include the A and B numbers as well as a time-stamp for the start of the call.
  2. The terminating network then sends their respective call details to Call Registry B.
  3. Both registries simultaneously exchange encrypted messaging via the internet to cross-validate the call details.
Any discrepancy between the call details indicates only one thing - fraud.

Once manipulation is detected, an operator can either block the call or choose to let it connect.

All traffic between operators within the AB Handshake community is impenetrable and guaranteed to be 100% free from all spam calls with no false positives. This is the incentive to join the community.

As more members implement the AB Handshake solution, the portion of fraud-free traffic around the world increases while the portion of fraudulent traffic decreases, eventually leaving the fraudsters with nowhere to go.

If adopted on a global scale, AB Handshake can eliminate Spam calls, for good.

To make such a vision a reality, the AB Handshake team accounted for cost and integration. The solution is affordable, easily integrated into the default settings of any operator's current network and can be used alongside any current FMS.

If your business is interested in joining the AB Handshake solution, integration is quick and affordable with a pay-as-you-grow model, no matter which country in the world you are located.

Partner With AB Handshake Today

When free from Spam calls, businesses can reconnect with their customers. End-users regain trust in the phone calls they receive on a daily basis and operators free up valuable resources for routing and processing legitimate calls.

The benefits of eliminating fraud extend far beyond financial recovery. You can discover the ways businesses flourish when they are fraud-free, here.

If you have any questions, or you would like to integrate the AB Handshake solution into your network today, feel free to contact us here. One of our representatives will be in touch today.

The AB Handshake ecosystem already consists of 200+ operators at various integration stages, from negotiation to contract signing and onboarding.

We are now actively onboarding providers around the globe and the system already validates live traffic to every country in the world.

We're waiting for you.