There are some specific measures operators and carriers can take to minimize SIM Box Fraud; however, at the end of the day, none of the traditional fraud management systems on the market can effectively eliminate all SIM Box Fraud with 100% accuracy.
While this may seem like a small problem, even if fraudsters maintain a tiny foothold in the telecom market, it amounts to billions in dollars in losses
each year for operators and non-telco enterprises
around the world.
In 2020, AT&T had a potential fraud loss of $3.1 billion
In 2019, Interconnect Bypass alone cost telcos around the world a whopping $2.71 billion
in losses, while the total amount of revenue lost to telecom fraud that same year was $28.3 billion
Therefore, operators often employ a Fraud Management System (FMS) in the hopes of protecting themselves.
A traditional FMS can use various methods to detect SIM Box Fraud, such as:
- Customer profiling
- Terminal analysis
- Usage monitoring
- Measurement of incoming vs outgoing traffic ratios
- Customer complaints of inaccurate caller IDs
- Test calls routed from fixed to GSM networks
And several others.
Once detected, operators can shut down fraudulent SIM cards.
However, each of these methods has its shortcomings. Shortcomings of Traditional Fraud Management Systems
For example, test calls are costly and some fraudsters are quite sophisticated - they'll even allow an operator to detect some quantity of their SIMs to give the operator the false confidence that it's detecting and stopping the SIM Box fraud, while hiding the full extent of their operation.
Traditional FMSs simply lack the technology to effectively eliminate SIM Box Fraud for good, before it strikes.
One of the main problems is that a traditional FMS takes a reactive approach to stopping fraud attacks.
After analyzing data collected from test calls and other measures, operators can update firewalls and adjust other protocols.
Meanwhile, fraudsters evolve and develop new tactics to bypass these new measures. This cycle leads to a game of cat-and-mouse in which fraudsters continuously maintain ways to infiltrate call chains and bypass interconnects.
This is the general problem operators face when trying to stop SIM Box Fraud and other forms of Interconnect Bypass Fraud.
Let's cover the other two
most common forms of Interconnect Bypass. Then, I'll explain what modern technology operators can use today to guarantee 100% protection from all forms of Interconnect Bypass Fraud, for good.