Credit/ID & Subscription Application Fraud

Our communications-driven world is blessed and cursed by greater access and “convenience”.

The blessing of convenience is that information is at our fingertips. We’ve moved from checking email messages once a day by smart computer. . . to once an hour by smart phone. . . to once every 10 minutes via smart watch. But the curse of convenience is we’ve made it much easier for fraudsters, con artists, and hackers to rob us.

That’s where credit bureaus come in. Credit bureaus protect businesses and consumers by throwing inconvenient obstacles in the path of the fraudsters. The emphasis at credit bureaus today is on using fraud prevention tactics that are also customer-experience-friendly, such as predictive scores, device risk assessment, and linkage analysis.

Several innovative solutions have either arrived or are under development in the credit area:

• Fraud Alerts via Device Intelligence – Through a big data platform, Experian maintains a history of activities associated with a particular device (smartphone, tablet, computer, etc.) The system recognizes whenever a particular device visits a website or opens up a mobile app, then creates fraud alerts where a suspicious linkage of a device to other websites and behaviors is found.
• Real-time Point of Sale Subscription Application Checks are an invaluable aid to stopping fraudsters from exploiting ID theft, credit mules, and the near-simultaneous ordering of expensive handsets by teams of fraudsters going to multiple stores. FRS Labs has delivered this new capability at Vodafone Ireland. And cVidya has recently integrated fuzzy matching technology into its FraudView for the same purpose.
• New Technologies will Simplify Identity Checks – Biometric technologies such as voice-printing shows great promise in making identity/fraud checks easier. The race is on for fraud management suppliers to offer solutions.

Solutions for Future Fraud Threats

Finally, some fraud solution categories have a relatively small market share today, but may loom large in the years ahead. Here’s TRI’s analysis:

• Insider, Sales & Dealer Fraud Solutions become far more valuable as other frauds are brought under the control. For instance, if SIM box bypass is being effectively blocked, inside fraudsters can establish “ghost trunks” that operate outside B/OSS control. TRI believes solutions will appear that automate the investigative processes that make Insider fraud checks more manageable. For instance, Subex offers pre-built topology libraries and metrics called Dynamic Network Analytics (DNA) that auto-configures processes across an operator’s revenue management systems.
• Anti-Fraud Solutions for Mobile Money and Payments is a promising market for unbanked regions of the world because telecoms have a wonderful opportunity to serve the financial needs of people whose banks cannot cost effectively serve. Anti-fraud solutions are emerging here from firms like Neural Technologies who currently protects the popular M-PESA service in Kenya, securing the movement of $10 billion of
• Consumer Abuse of Mobile Data Plans is a worry as operators roll out premium usage plans that people access illegally. cVidya is attacking the problem with a solution that combines DPI data feeds and Hadoop technology.

While the telecom fraud threats are many and highly diverse, operators are cooperating with others like never before and some innovative software and managed service solutions have emerged. But history proves the criminal mind always finds ways to exploit our industry’s weaknesses. To maintain control over fraud, then, operators must step up their investments in rules- and behavioral-learning-based analytics and employ expert investigators who are thoroughly versed in operating processes and B/OSS systems.