What is Subscription Fraud? How to Tackle Telecom Subscription Fraud?

Subscription fraud can encompass many methods and generally refers to circumventing credit and risk controls to obtain telecom products and services without the intention to pay. Fraudsters generate synthetic ID information, obtain via illegitimate means or extract from existing customers using methods like social engineering. This data is used to manipulate the onboarding process, and each subscription fraud event can subject an operator to a significant loss. In fact, operators globally estimate that almost 40% of all bad debts are caused by subscription fraud.

In cases where legitimate customers have been compromised and fall in the bad debt category, this can have a negative impact on customer satisfaction.

A Precursor to Other Types of Fraud

Subscription Fraud is the starting point for several other telecoms frauds and is the most damaging of all non-technical fraud variants. Fraudsters don’t just obtain legitimate service illegally, and they generally act as a path to Revenue Share Fraud, Bypass Fraud, etc. The effects can be disastrous in terms of increasing complaints, poor customer experience, dissatisfaction among employees, and reducing investor confidence.

Tackling the Problem

Smart Authentication

Subscriber behaviour is complicated; users log in from numerous devices, places, and channels. Smart authentication focuses on thoroughly understanding not only the digital identity of a connecting customer but their historical activities too. By merging global intelligence data, it is possible to streamline onboarding, avoid illegal account takeovers and identify insider threats. Access to products and services must demand strong authentication requirements. Machine learning algorithms can gather information on the subscriber in order to better understand the risk they might bring in.

Biometrics

Biometrics, such as voice recognition technology, has become extremely beneficial to the financial world. Voice recognition offers improved ID verification since passwords can be guessed or hacked. Voice recognition can be combined with several methods of multi-factor authentication like OTPs. This combination makes way for a comprehensive, adaptable, and secure approach to prevent subscription fraud. Additionally, fraud can be detected, prevented, and deterred at every step of the process. Real-time monitoring activity in accordance with compliance regulations can also help tackle the problem.

Document Authentication

Document verification is the most important part of verifying customer identity. Document verification algorithms perform checks to establish authenticity and legitimacy, as well as to make sure that a document is not forged or altered. They deliver an integrated identity validation check to help control fraud risk across the whole customer lifecycle. The multi-layered, risk-based method leverages multiple information assets, intelligent analytics, probabilistic decision policies, and knowledge-based verification to safeguard business and facilitate efficient account activations, identity verification, and regulatory requirements.

One stop solution to address all types of frauds across Voice, Data and Digital Services

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