non network fraud - r
DESCRIPTION
The presensetation descibes the various types of non-network frauds faced by telecom sector, which is a major threat but offten not given the requisite attaention thus causing huge losses.TRANSCRIPT
Tackling Non-Network Telecom Fraud
The Key to Business Assurance
Ahmad Nadeem SyedDirector Revenue Assurance &
Fraud ManagementMobilink
7th WeDo Technologies' Worldwide User Group Meeting 2012
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My Brief Profile● Currently Working as Director Revenue Assurance & Fraud
Management in Mobilink● Total Experience – 30 Years● Telecom Experience – 22 Years● Expertise
- Revenue Assurance, Fraud Management- Billing & Collection- Process Re-engineering- Financial Management- Business Planning and Budgeting
- System Designing and Computerization
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My Pakistan - My Mobilink
Area: 796,095 sq km Population: 190 Million
GDP PPP $488 billion
Internet Users 20 MillionFixed Line Subs 3.5 Million
Mobile Subs 112 MillionMobile Operators - 5
Mobilink is Market LeaderMobilink Subs 35 Million
Mobilink – An Orascom/Vimplecom Company
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Cruising through the Presentation
● Types of Telecom Frauds● Non-Network Frauds – Types and Modus
Operandi● How the opportunity is created?● Solutions
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Main Categories of Telecom Fraud● Network
Any fraudulent activity, where network is involved such as
usage, subscription, PRS etc. externally or system configuration
changes with mala fide intentions internally.
● Non-NetworkAny activity related to business operations in connection
with customers such as sales, collections, commissions etc.
● Business OperationsUsual Business Frauds not related to customers
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I Would Not Commit Fraud:
Because● My morals do not allow me● I do not have opportunity● I do not have a motive
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Beneficiaries
● Internal● External● Colluded
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Why More In Telecom
● It deals with masses – Customers in millions● It has volume – Transactions in billions both
traffic and value● Large size of:
- Staff- Distribution channels
● Multiple business systems● Severe Competition – Incentive Plans
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A Few Non-Network Frauds● Your money my play – Check payment trickery● Fake Sales - Sales Channel Fraud● Fake Mobile Number Portability● Bank reconciliation - Juggling around● Defaulters Restoration ● Illegitimate Reward point redemption ● Fake Bank accounts● Illegal SIM creation● Used scratch cards
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The Quantum
Not only the quantum of non-network frauds is generally much bigger than network frauds but also such frauds remain undetected for long time giving ample time to the fraudsters to get away with the
money with little hope for recovery● Direct Loss● Indirect Loss
- Extra network capacity- Overheads
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Modus Operandi/ImpactYour money my play – Check payment trickery
Generally as a result of collusion with staff
● Delayed payments by Franchises● Outstation checks● Bounced Checks
Bad Debt and delayed cash flow
Fake Sales/Mobile No. Portability - Sales Channel Fraud
Sales staff for earning commission● Multiple SIMs in same name● Keep Active for minimum mandatory time● Initial Low usage and full payment● Large Usage on a few and min. on others
and Default on all ● MNP number involved in network fraudExtra commission and network capacity cost
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Modus Operandi/ImpactBank Reconciliation – Juggling Around
Internal in collusion with Franchises● Large number of Company’s bank accounts ● Juggling Franchises AR Balances and getting
payments in own name● Tempered reporting● Extended over long time with small
amountsFinancial Loss to the Company
Illegitimate reward points redemption
Internal ● Cash Received and pocketed● Customer account credited with reward
points● Company’s system not integrated with
vendor’s system Financial Loss to the Company
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Modus Operandi/ImpactFake Bank Accounts
Internal Collusion with Bank Officials● Opening accounts using company’s name ● Becoming signing authority● Depositing customer’s/Franchises checks small
amounts● Siphoning the money sharing with bank officials
Financial Loss to the Company
Defaulters Restoration - Post Paid Customers
Internal ● Defaulters contacted● Waivers granted against some cash for self● Connections restored, who default again● New connections are issued to same under some
other name
Financial Loss to the Company
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How The Opportunity is Created?
● Disintegrated systems● Flawed Incentive Plans● Lack of coordination among the departments● Lack of proper Tools and controls● Non-availability of proper reporting system
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What needs to be done?
● Policy rationalization Including commission and sales● Integration of Systems● Regular Process Review● Business Fraud Management System :
- Integrated with various Business and technical systems
- Capable of importing data from various systems of varying formats
- Capable of producing 4 W forensic results
● Air to Cash Reconciliation Model
4 W Investigations
Why ?The Fraud analyst must be suspicious by default 16
What ?
● Nature of Activity?● Volume?● Past Trends?● Any Similar Activity?
When?
● Timing?● Past Occurrence?● One Time● Seasonal?● Event Oriented?
Who ?
● Who did it?● His/Her past
record?● His/Her links?
Where?
● Where Happened?
● Past Trends?● Max. Expected
Level? ● Past Occurrence?
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Air to Cash Reconciliation Model (ATRC)
Knowing and Ensuringthat
A minute in air is translated into cash in company’s hands
Maximum and InTime
An end to end reconciliation concept
Air to Cash Reconciliation Model
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Total Traffic
Discounts/Free Minutes
Chargeable
Traffic
Post Paid Voice & VAS
Total Traffic
Discounts/Free
Minutes
Chargeable Traffic
Pre Paid Voice & VAS
BFMSPostpaid Billing System
IN Platform
Accounts
Receivable
Commission Calculator
Bank Recon System
Sales Management System
Customer
Service System
Inventory
Management
Front End Cash
System
OTAR Platfor
m
Voucher Manage
ment System
