Combating Wangiri Fraud: The Need for Collaboration
What is Wangiri Fraud, and how is it a big problem for CSPs?
Wangiri fraud, a call-back scam, is a Japanese word meaning ‘one ring and cut.’ Just as the name suggests, in this form of fraud, fraudsters give a missed call to encourage unsuspecting subscribers to call back to fraudulent premium numbers. CSPs incur both direct and indirect losses due to Wangiri Fraud. It impacts the customers adversely, resulting in customer churn due to high customer dissatisfaction from bill shocks and bad customer experience. It also has a negative impact on the operator’s brand image.
As per the CFCA 2019 fraud loss survey report, Wangiri is one of the top 5 fraud methods used by fraudsters to carry out fraudulent activities. It is also estimated that telcos are losing close to USD 1.82 billion globally to this fraud. Also, as per the RAG RAFM 2020 Survey, the total global cost for compensation for Wangiri was $1.31 billion.
The challenges associated with Wangiri Fraud
One of the key challenges in detecting Wangiri fraud is the lack of timely availability of threat intelligence. Although telcos frequently update their fraud management systems with the latest hotlist/blacklists, they usually do not have a platform to exchange data in real-time. As a result, telcos always end up being at the receiving end until certain number ranges are tagged as fraud and blacklisted.
The need for collaboration and community-driven initiatives
It is vital to stay one step ahead of the fraudsters in the fraud management space because the fraudsters themselves evolve over time. They change the type of fraud they commit. Therefore, one needs a proactive approach to the problem rather than a reactive one.
One way to achieve this is to build a collaboration mechanism by which information can flow easily between entities in the telecom ecosystem, making it easier to flag and prevent fraud.
The industry has looked at ways to share data and have collective databases to identify and share Wangiri fraud numbers. Groups like RAG have actively worked to address some of these problems by bringing industry partners together to innovate and tackle Wangiri fraud effectively.
The RAG Wangiri Blockchain Consortium is a coming together of telcos and vendors with a common interest in reducing the number of Wangiri fraud calls received by phone users. The consortium does this by using blockchain technology to share intelligence in near to real-time about actual Wangiri calls that have already occurred. This data will help telcos and suppliers improve the algorithms and reference data used for the proactive management of future calls, increasing the likelihood of correctly identifying a Wangiri call before the intended victim suffers harm. The consortium includes more than 100 telcos across Europe, Asia, Africa, and the Americas.
The Subex-RAG Partnership to leverage RAG Database for fraud detection and prevention
Subex, being a pioneer in the Fraud Management space, partnered with the Risk & Assurance Group (RAG) Wangiri Blockchain Consortium to advance innovation in the blockchain space. Subex was one of the first vendors to get into this partnership. This partnership aims to integrate the blockchain database with the Subex Fraud Management system and leverage them as hotlists or reference data to prevent fraud proactively.
Blockchain is a transformative technology, and it is intriguing to see it being used to solve evolving real-world problems such as fraud detection. When it comes to dealing with fraud, the faster the information is exchanged, the better it is to be able to address and prevent fraud. Blockchain enables much faster data exchange. Furthermore, this received data can be actively leveraged for fraud detection in rule-engine and machine learning (ML) techniques. In ML, this can be one of the seed data. Moreover, it can further enhance proactive fraud detection when the data is leveraged from the signaling layer.
Making data intelligence available to the telco community is a crucial aspect of addressing the problem. Strategic partnership and innovations in blockchain mark a new era of sharing data and near-real-time threat intelligence for the telecom industry.
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