GLF launches annual fraud report to halt $17 billion of crime
London, UK: ITW Global Leaders’ Forum (GLF), a leadership body of the International Carrier Industry, has published the first ever report on international wholesale telecoms fraud that is estimated to cost businesses and consumers as much as $17 billion annually and calls on stakeholders to cooperate further in order to reduce the devastating impact of fraud.
In its ‘Taking Action Against Fraud’ report, the GLF finds that the size and scale of fraudulent traffic can only be combatted by deeper collaboration among international wholesale carriers. Fraudulent telecoms traffic is frequently used by organized crime and terrorist networks to raise and distribute funds.
The report follows the launch of the GLF’s Code of Conduct in March to guide international carriers on how to manage fraudulent traffic. It was developed in partnership with the i3forum, a non-profit focused on supporting transformation in the carrier business and establishes the principles that carriers have agreed to commit to.
The GLF also announced that China Telecom Global, Globe Teleservices, iBasis, Identidad Telecom, IDT, S and BTS Corp., Tata Communications and VEON Wholesale Services have joined the Code of Conduct, bringing total number of signatories to the Code to 27 carriers.
Commenting on the release of the report, Daniel Kurgan, CEO of BICS and the lead of GLF’s working group on fraud said: “Since its launch in March, the GLF Code of Conduct has been an effective tool to align carriers behind a common goal of reducing fraudulent traffic. This report marks the launch of what I hope will become an annual milestone in our industry to assess our progress in reducing the impact and volume of fraudulent traffic and serve as a catalyst for future action.”
The GLF is taking action to eradicate fraud from the wholesale industry and has surveyed more than 20 leading international telecom carriers in this global analysis. The GLF is striving for an operating environment that is free from fraudulent traffic and, as a result, creates benefits that extend far beyond carriers and actively contributes to society.
Marc Halbfinger, CEO of PCCW Global and the Chair of the GLF said: “One of the core purposes of the GLF is to provide a single voice on behalf of the global carrier industry. A priority for the GLF is to assure senior commercial representatives are commonly endorsing the work of other industry bodies and working groups. Through our work on fraud we are pleased to endorse the methodical and professional in-depth effort conducted by i3forum and the CFCA, and be able to provide additional impetus for this initiative. I am confident that this report will serve as a call to action to global carriers to accelerate their own activities to reduce fraud.”
The report, which will become an annual milestone for the carrier industry, found that:
- Types of fraudulent international traffic, which according to estimates of the Communications Fraud Control Association amount to $17 billion annually, that has seen most increases in the past year include missed call campaigns and private branch exchange hacking
- 85% of carriers cite fraud as a priority for their organisation with 74% saying that its importance is growing
- Having dedicated fraud management full time employees who are not linked to commercial performance is critical to ensuring that they have clear incentives to reduce fraudulent traffic
- The use of fraudulent traffic by organized crime to raise and distribute funds highlights how important is that international carriers work to reduce fraud as its impact extends beyond a carrier’s profit and loss
- While most carriers can identify and remove fraudulent traffic from their networks within six hours, contractual service agreements and a fear of mistakenly blocking legitimate traffic can make removing fraudulent traffic complex
- Proactive customer management and allocating additional employees are the two primary internal carrier requirements to reduce fraudulent traffic. Only 5% carriers see technical innovation such as AI as a reason to reduce employees focused on fraud management
- Several carriers are working together informally to share information and pool resources, subject to competition law requirements, to address fraudulent traffic and there is an appetite for greater collaboration
- Formalising information sharing and communication networks across carriers will improve ability to collaborate in the shared aspiration of reducing fraudulent traffic
The GLF consists of CEOs and business leaders from the largest carriers engaged in buying and selling wholesale telecoms services globally. Its partnership with i3forum on reducing fraud is one of many initiatives to support the long-term growth of the industry.
Jussi Makela, Director of the GLF said: “Leading international carriers are committed to eradicate fraud, not only because it has a negative financial impact on their business but also as it is the right thing to do. The complex nature of the global carrier ecosystem and the sophistication of the fraudsters mean that only by working together, can the industry address this issue. That is why cooperation between various bodies such as GLF, i3forum, the CFCA and the carriers themselves, is critical.”
The survey was conducted by Delta Partners, which is a leading advisory and investment firm specialized in Telecoms, Media and Technology. Sam Evans, who is a Partner and led the survey said: “Delta Partners is delighted to work with GLF on such an important strategic and financial issue for the international carrier industry. Seeing the initial adoption of the GLF Code of Conduct, the prioritization carriers are increasingly allocating to fraud management and keenness to take further action at an organisation and industry bodes well for reducing fraud in the future.”
About ITW Global Leaders’ Forum
ITW Global Leaders’ Forum (GLF) is a network of the leaders from the world’s largest international Carriers, who convene to discuss strategic issues and to agree collaborative activities with the aim of upholding the principle of interoperability and ubiquitous international and technological coverage. The international wholesale Carrier industry is a critical part of the global ecosystem, providing the backbone that enables digital services to be distributed around the world. The GLF’s primary objective is to act as the voice and provide leadership and direction for the industry by advocating common priorities that will limit network fragmentation and improve interconnectivity so that new digital services can be delivered at scale anywhere in the world.
© 2018 Delta Partners.