FCS UPDATE FCS set to tackle fraud
FCS has joined the battle against phone hacking. Here, General Manager Michael Eagle outlines plans to tackle fraud in the communications industry and highlights areas in the supply chain where the industry needs to take responsibility for fraud prevention.
F
raud is a subject that no one in any industry likes to talk about but FCS believes that it is becoming an
increasingly costly overhead for the communications sector and that industry needs to recognise the problem, introduce more clarity into the roles and responsibilities of all parties in the supply chain and to share information more effectively if it is going to tackle the problem.
FCS regularly receives reports from its members on fraud incidents. These reports are relatively infrequent but we believe that they represent the tip of a very large iceberg. It is clear that many cases, especially those involving relatively small losses, go unreported because CPs appear to believe that there is no effective way to resolve the problem once a fraud has been perpetrated. Many in the industry now seem to regard it as a cost of doing business. The amounts involved in this type of fraud vary greatly but what can seem to the network operators to be relatively small amounts can cause great distress to resellers who are faced with either having to swallow the cost or risk losing business. It is also damaging to the reputation of the individual service provider and customer confidence in the sector more generally.
In recent times, reports finding their way to FCS have tended to focus on PBX hacking. However, a few years back FCS was alerted to a rash of ‘passing off’ frauds within a very short space of time. The modus operandi suggested that these cases were the work of a single well organised group and the amounts at risk were very large. At the time sharing of intelligence and
particularly in the immediate aftermath of an event. Contracts at both wholesale and retail level are often vague and this can lead to resellers and service providers getting caught in the middle of the disputes about liability which inevitably arise.
The FCS view is that each member of the supply chain has responsibilities and an important part to play in preventing and dealing with fraud. Accordingly, FCS wants to establish clarity of responsibility and best practice at each level to prevent, restrict or mitigate the losses which would otherwise be suffered by innocent parties.
Michael Eagle
providing timely alerts on the detail of these cases enabled members to recognise further attempted frauds and avoid the consequent losses.
Phone hacking
Phone hacking itself takes several guises with calls being generated to a variety of destinations in the UK and overseas. This international dimension means that issues of jurisdiction make it difficult to know what remedies are available to affected CPs and which organisations can offer help. However, in a recent case reported to FCS, even though traffic was being directed to a UK Premium Rate (09) number, neither PhonepayPlus or Ofcom was able to offer any assistance in resolving the matter.
The supply chain is complex so it is difficult to allocate responsibility or liability for losses sustained,
• Wholesalers, the network operators (carriers) need to set up effective systems in line with agreed industry standards to detect, report (and, where agreed, to automatically block) any unusual call activity as soon as it occurs.
• Service Providers need to ensure that they fully understand the supply chain and are geared up to receive and react to intelligence in a timely fashion – by providing out of hours contacts (especially at weekends) to individuals who are empowered to make speedy decisions about blocking calls.
• End user customers must also operate secure on site procedures to agreed industry standards to prevent hacking and must cooperate with their service provider CP to react effectively when potentially fraudulent activity is identified. These arrangements need to be checked and reviewed on a regular basis.
It is key to the above that contracts at each level spell out clearly
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responsibilities, contingency arrangements to be implemented when fraud is reported and the liability for all concerned for compliance or non-compliance with duties set out in the contract.
There are a number of organisations that have a responsibility and can make a contribution to preventing offenders from benefiting from fraud, including the Police, Ofcom, PhonepayPlus and the Telecommunications UK Fraud Forum (TUFF). However, the arrangements for reporting incidents, the nature of the assistance which can be offered and the extent of the powers of each of these organisations needs to be better understood by all CPs – and easy to access.
FCS also believes that there are loopholes in current legislation and regulation which need to be plugged and that lobbying of the relevant authorities will also make a significant contribution to reducing fraud in the industry. This is an area which FCS intends to focus on over the coming months and will aim to cooperate with all interested parties.
As an example, FCS supports the seminar to highlight telecoms fraud issues to the channel community which is being organised by TUFF in conjunction with Nine Group. The seminar will be held on Wednesday 19th September at The Union Jack Club, London, staring at 09:15 and is free to attend.
For more details of the seminar, go to
www.tuff.co.uk or www.
ninegroup.co.uk. To provide more general feedback on fraud and how it has affected you, contact
meagle@fcs.org.uk
n
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