Wholesale Fraud – your key 10 minute primer

The role of iCONX’s Wholesale Fraud Management System (“FMS”) solution is to detect suspicious calls or call patterns, support the diagnostic ‘case management’ process determining whether a scenario is fraudulent, and empower subsequent blocking of the relevant number ranges associated with a confirmed fraud - either via the operator’s own blocking or barring tools or, if required, using the “iCONX Blocking Portal”. Direct GUI control is offered over all these functions.​

iCONX specialises in detecting Revenue Share fraud types (where a Fraudster shares revenues from artificially inflated traffic to premium destinations), and Bypass fraud types (traffic pretending to be something it is not, in order to bypass the correct charges). This gives the iCONX solution a particular “wholesale” focus. For Subscription fraud (where a subscriber runs up charges with no intention to pay, often faking ID via a number of methods), a separate Subscription FMS will usually be required and this too is an important BSS solution for any mobile operator.

Therefore iCONX is an ideal ‘companion solution’ to a separate Subscription or Retail FMS. iCONX specializes in detection of the following fraud scenarios :

  • Wangiri A and Wangiri B : short/zero duration calls placed from high-cost destinations designed to induce the recipient to call back, usually fuelling a revenue share exercise. Operator feedback indicates an average 10% of subscribers return such calls!
  • PBX Hack : Fraudster hijacks PBX to pump calls to high-cost / premium rate numbers which have often been created specially for the fraud.
  • High Cost Fraud : Fraudster may be harvesting revenue share from artificially inflated traffic. Needs to be distinguished from bona fide high-cost calls (- which can be good business for an international carrier)
  • IRSF (International Revenue Share Fraud) : Artificial traffic inflation, often generated via Wangiri, PBX hack, SIM cloning or subscriber frauds. IRSF is the overall commercial framework which monetises Wangiri (and other) frauds.

The iCONX solution excels in Early Detection. A Retail FMS tends to focus on the calling activity of an outbound subscriber. The iCONX FMS, however, looks at the suspicious inbound traffic streams which predate the subscriber’s reaction – these inbound calls often being the “bait” that will induce the subscriber to generate the artificially high traffic volumes that the revenue share fraudster wants. In this way, despite being wholesale in its focus, iCONX also positively reduces the volume of subscriber fraud cases as a value-add.

iCONX also identifies wholesale impacts; for instance, large scale Wangiri attacks may create network flooding, which in turn negatively impacts on a carrier’s QoS KPIs – and may even result in lost business as customers route away from you.

The solution also provides advanced tools to help identify where apparent frauds may, in fact, be legitimate calls, albeit with a manipulated CLI to deliberately misrepresent the country origin. Revenue leakage can occur if non-EU originating traffic purports to be from the EU. By trapping such traffic, instead of blocking it (as per a fraud), the interconnect team has an opportunity to recharge the traffic at the higher approved rate.

Telco Business Case for investing in Fraud solutions :

  • Protect B2B customers from costly hacks
  • Enable Voice transit carriers to confidently sell lucrative (but riskier) high-cost destinations
  • Eliminate wholesale losses where the carrier is still obliged to pay termination but the customer refuses to pay the retail bill
  • Reduce B2C subscriber nuisance, complaint and churn, and avoid damaging and costly B2C bill-shock losses
  • Large scale attacks impact Networks & may depress Quality of Service, leading to loss of wholesale business as carriers route elsewhere
  • Reduce FTE administrative burdens including fraud case admin (eg police letters) and impact on customer services

Fraud Key Market Indicators :

  • Fraud estimated to cost the industry €29bn per annum
  • 1.27% of all telco revenues estimated to be fraudulent traffic
  • 26% of carriers reported an increase in IRSF during 2017-2018
  • 85% of carriers cite fraud as a priority, with 74% planning to increase investment in counter-measures
  • PBX Hack and Wangiri frauds growing rapidly, with more than 60% of carriers reporting an increase (2018)


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