With cellular and PCS fraud losses forecast to reach $677 million in 2002, it is essential for carriers to understand the components of fraud and the solutions available to combat it. International Data Corp.s recent report, High Crimes and Misdemeanors: Cellular/PCS Fraud, identifies the types of fraud and the solutions available to combat fraud and profiles offerings of the major fraud solution vendors.
Among solutions addressed are personal identification numbers, profiling systems, RF fingerprinting, authentication, verification, frauder databases, prepaid systems, security systems and real-time billing. The report also provides forecasts of dollar losses due to fraud.
Given the considerable competition in the cellular/PCS markets, any financial loss, including fraud losses, is significant, says Julie Rietman, senior analyst in the Wireless and Mobile Communications research program and author of the study. Carriers must take the necessary steps to reduce fraud if they plan to survive in todays competitive landscape.
One of the key findings is that, while cloning fraud is on the decline, subscription fraud is on the rise. The bad news is that subscription fraud is forecast to reach losses of $473 million in 2002. The good news is that more and more solutions are coming onto the market to combat subscription fraud. Frauder databases are just one example.
By using a frauder database, a carrier can identify when a potential subscriber provides invalid data, such as a ZIP code and address that dont match or a Social Security number that doesnt exist. This doesnt mean the fraud problem will be solved. Fraud perpetrators are adaptive and the problem will never be totally eliminated. The best carriers can do is stay abreast of the new types of fraud and implement solutions to combat it in a timely manner.
For more information, go to www.idc.com.