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It’s good to share - Global telecommunications companies push the boundaries on fraud data sharing

Fraud has risen sharply across a number of industries in recent years and there is evidence that fraudsters are embracing emerging technologies to increasingly target mobile operators. As mobile subscription fraud becomes easier to perpetrate many organised criminal gangs are moving in to telecommunications fraud as a lucrative form of income and there are suggestions that this type of fraud is more now profitable for some criminals than drug smuggling.

In the UK alone, the total annual fraud loss is around £1bn with mobile operators perceived as more vulnerable than fixed line payers. As the potential dangers of fraud increase many telecommunications companies around the world are coming together to discuss the issues and increase protection against fraudsters. Fraud data sharing schemes are growing in both scale and quality of information and are providing an effective platform to increase fraud prevention levels and mitigate risk through data sharing.

Up to 70 percent of telecommunications fraud occurs in and around weaknesses in a network's subscription processes. To combat telecommunications fraud in the subscription process Experian are deploying the Fraud Solution, Hunter, to identify the anomalies in Post Pay applications and prevent fraud and early arrears. Experian are also involved in developing data sharing schemes in Europe, alongside established sharing schemes operating across the UK and the Netherlands.

The results of telecommunications data sharing are impressive, analysis of the UK market shows that in excess of £1million uplift in the value of total fraud savings is achieved for each of the participating members and a 50%+ increase in the number of fraud cases detected.

The typical Return on Investment for telecommunications data sharing (Experian data)

In the Netherlands Preventel is a closed user group in which all Dutch networks participate. Experian are investigating  performance enhancement through rules and reviews to ensure that the scheme is able to effectively exploit the massive growth in data that is currently increasing at a rate of 37% per year. The debt conversion rate for Preventel is significant, usually falling between 6% - 10%.

A number of European countries have successfully petitioned their Governments to counter local data protection laws and Experian is engaged with networks to discuss the different concepts of data sharing and to progress sharing initiatives. In Central Europe Experian is working with an existing credit bureau that provides data sharing capabilities to the local market and a recent knowledge sharing telecommunications roundtable event in Eastern Europe allowed Experian to highlight the benefits of data sharing to senior figures from a range of networks and to discuss fraud prevention strategies and opportunities for development and the debate on fraud prevention tools and strategies will be at the heart of the programme of the forthcoming Experian International Telecommunication Forum.

In addition to the development of the telecommunications data sharing schemes, Experian is continuing a programme of global expansion and is initiating fraud reviews, as well as creating dialogue with many other countries and various different telecommunications networks.

Experian through a vast experience of originations, debt management and scoring as well as fraud management have been able to advance discussions with telecommunications organisations around the world. Globally, Experian works with around 90 telecommunications companies in 16 different countries and utilises knowledge gained in local markets to develop industry best practice. 

Liam Rawsthorne
Fraud Consultant
Decision Analytics
Experian

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