2013 Global Fraud Loss Survey

Communications Fraud
Control Association
2013 Global Fraud Loss Survey
Overview



Survey Type & Methodology
Executive Summary
Results






Fraud Management Snapshot
Top Fraud Methods & Types
Top Countries Where Fraud Originates & Terminates
Comparison of Fraud Trends
2013 Global Fraud Loss Estimate
2013 Estimated Fraud Losses by Method, Type, CSP
Size and Region
Survey Type & Methodology
Panel of Experts Survey:


Surveys taken from fraud and security experts working within
the industry who are directly involved in identifying and
stopping communications fraud
Responses were received from:




93 Communications Service Providers (CSPs) located throughout the
industry and around the globe
CSPs included both Small (<1K employees) and Large (100K+)
CSPs included wireless, wireline, broadband, and narrowband service
providers
CSPs reported providing service in multiple areas including: voice, data,
financial services, and content distribution
Executive Summary
Highlights:

2013 Global Fraud Loss Estimate*:




$46.3 Billion (USD) annually—The 15% increase from 2011 is a result of
increased fraudulent activity targeting the wireless industry.
Approx. 2.09% of telecom revenues—The 0.21% increase from 2011 is a
result of fraud losses growing at a faster pace than global telecom
revenues.
94% said global fraud losses had increased or stayed the same–a 4%
decrease from 2011.
92% said fraud had trended up or stayed the same within their
company—a 3% increase from 2011.
Top 5 Fraud Methods Reported by
Surveyed Companies:
 $5.22 B – Subscription Fraud
 $4.42 B – PBX Hacking
 $3.62 B – Account Take Over / Identity
Theft
 $3.62 B – VoIP Hacking
 $3.35 B – Dealer Fraud
Top 5 Fraud Types Reported by
Surveyed Companies :
 $6.11 B – Roaming Fraud
 $5.32 B – Wholesale Fraud
 $4.73 B – Premium Rate Service
 $3.55 B – Cable or Satellite Signal
Theft
 $2.96 B – Hardware Reselling
*Note: In 2013 fraud classifications were divided into methods and type categories
For more information please visit: www.cfca.org/fraudlosssurvey/
2013 CFCA Survey Results
2013 Survey
In which region are you located?
35.0%
31.9%
30.0%
28.6%
25.0%
20.0%
15.0%
11.0%
10.0%
8.8%
8.8%
6.6%
5.0%
2.2%
2.2%
0.0%
Asia
South
Pacific
Central
and South
America
North
America
Western
Europe
Eastern
Europe
Africa
Middle
East
Note: Local, Regional, National and International CSPs participated in the survey
2013 Survey
Which services does your company provide?
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Pre-paid Mobile Post-paid Mobile
Fixed Line
Services
Cable & Satellite
Wholesale
Internet
Voice (Examples: Local, Long Distance, & International)
Data (Examples: VoIP & Over-the-Top, and other communication services.)
Financial (Examples: mobile purchase & eCommerce)
Content (Examples: IPTV, Advertising, etc.)
Machine-to-Machine (Examples: Smart Meters, Cars, Sensors...)
Other
2013 Survey
How many employees are in your company?
3.6%
4.8%
17.9%
19.0%
<1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 50,000
50,001 to 100,000
100,001 +
17.9%
36.9%
Note: Small, Medium and Large CSPs responded to the survey
2013 Survey
How many subscribers does your company have?
4.8%
6.0%
8.4%
14.5%
<10,000
10,001 to 1,000,000
14.5%
1,000,001 to 10,000,000
10,000,001 to 25,000,000
25,000,001 to 50,000,000
50,000,001 +
18.1%
33.7%
Wholesale Only (no end
user subscribers)
2013 Survey
Where is your fraud department situated?
Security
32.8%
Operations
17.2%
Finance
IT
IT
Operations
4.7%
Security
45.3%
Finance
0%
10%
20%
30%
40%
50%
Since 2011 about 8% of Fraud Departments have moved from under Finance to IT &
Security; Other functional areas included Risk Management, Internal Audit, Revenue
Assurance, Customer Care, Network Operations and Routing.
2013 Survey
How many are in your Fraud department?
60%
51%
50%
50%
42%
40%
30%
36%
28%
27%
26% 26%
25%
20%
20%
16%
13% 13%
12%
10%
5%
5%
4%
2%
0%
0%
0%
Analysts
Investigators
<3
3 to 5
6 to 20
Administrative & Case
Management
21 to 50
Other (please specify)
51 +
Fraud departments grew by about 2% since 2011. However, larger departments reduced
Fraud Analyst positions by about 5%.
Notes: ‘Other’ category includes staff managers and supervisors. Some CSPs reported
revenue assurance and subpoena compliance personnel in their departments. Some CSPs
also reported as little as one person on staff.
2013 Survey
When is your fraud department staffed?
15%
44%
44%
44%
Holidays
Off-Hours Coverage Provided by
Another Organization
Non-Business Hours (24 Hours)
17%
41%
Weekend
50%
Extended Business Hours
42%
Business Hours
11%
32%
Weekdays
47%
65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Off-hour coverage on weekends and weekdays grew by about 3% since 2011.
2013 Survey
What functions apply to your current role and
responsibilities?
Vendor/Consultant
2.1%
10.6%
Law Enforcement
25.5%
Security/Network
12.8%
Legal/Regulatory
36.2%
Finance/Billing/Revenue Assurance
21.3%
Customer Service
38.3%
Supervisory
76.6%
Fraud Detection
10.6%
End User
40.4%
Investigation
12.8%
Security/Physical
25.5%
Operations
Sales/Marketing
Non-Supervisory
8.5%
4.3%
68.1%
Fraud Investigation
Systems Administrator
0.0%
10.6%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
2013 Survey
Are you a member of any other organizations?
CFCA
29%
GSMA FF
33%
DFF
2%
TRMA
3%
NCFTA
2% i3
FIINA
14%
ETNO
3%
8%
CINNA
2% ATFRA
TM Forum (RA)
3%
2%
CFCA
GSMA FF
FIINA
ETNO
TM Forum (RA)
ATFRA
CINNA
i3
NCFTA
Many CSPs reported being a member of more than one organization
TRMA
DFF
2013 Survey
How many fraud incidents does your department
handle per month?
Estimated Cases Annually Per Region
Estimated Monthly Case Volumes
51 to 100,
16.3%
101 to 500,
28.8%
501 to
1,000,
7.5%
< 50,
22.5%
1,001 +,
25.0%
200,000
177,349
180,000
160,000
140,000
120,000
100,000
80,000
54,569
60,000
40,000
13,642 13,642
20,000
Asia
Central and South America
Western Europe
Africa
197,812
68,211
54,569
40,927
South Pacific
North America
Eastern Europe
Middle East
On average, fraud departments reported 117% more cases per month since
2011. The majority of these cases were reported by North American and
Western European CSPs.
2013 Survey
How many cases does your department refer
to law enforcement per YEAR? 101 +; 11.4%
None; 11.4%
11 to 100; 34.3%
< 10; 42.9%
Since 2011, there was no change in the number of CSPs not referring cases to
law enforcement. CSPs that do refer cases reported an 11% increase.
2013 Survey
Why do you think cases are not reported to law
enforcement?
Debt recovery pursued through
19.7%
20.0%
18.2%
civil means
18.2%
18.0%
16.0%
14.0%
13.6%
13.6%
12.1%
12.0%
Not referred due to lack of
evidence
10.0%
Perceived lack of interest by law
enforcement to take the case
8.0%
6.0%
4.0%
2.0%
No faith in the judicial system to
administer the right punishment
to deter others
No perceived value to the
business
4.5%
Perceived lack of understanding
by law enforcement to pursue
the case
Lack of resources
0.0%
CSPs reported an increase in faith and confidence in law enforcement to pursue cases.
However, many reported continued resource constraints in this area.
2013 Survey
What do you view as the top 5 fraud methods
GLOBALLY?
0%
2%
4%
6%
8%
10%
12%
13%
Roaming Fraud
11%
Wholesale Fraud
10%
Premium Rate Service
8%
Cable or Satellite
Hardware Reselling
14%
6%
2013 Survey
What do you view as the top 5 fraud types
GLOBALLY?
0%
5%
10%
15%
16%
International Revenue Share Fraud (IRSF)
11%
Roaming Fraud
10%
Premium Rate Service
9%
Interconnect Bypass (e.g. SIM box)
Payment Fraud
20%
7%
In 2011, the top 5 fraud types were: PBX/VM Fraud, International Revenue
Share Fraud, Subscription Fraud, Bypass Fraud and Roaming Fraud.
2013 Survey
What do you view as the top 5 fraud methods
at YOUR COMPANY?
0%
2%
4%
6%
8%
10%
11%
Subscription Fraud
10%
PBX Hacking
Account Takeover / Identity Take Over
8%
VoIP Hacking
8%
Dealer Fraud
12%
7%
2013 Survey
What do you view as the top 5 fraud types at
YOUR COMPANY?
0%
2%
4%
6%
8%
10%
12%
13%
Roaming Fraud
11%
Wholesale Fraud
10%
Premium Rate Service
8%
Cable or Satellite
Hardware Reselling
14%
6%
In 2011, the top 5 fraud types were: PBX/VM Fraud, Subscription Fraud,
International Revenue Share Fraud, Bypass Fraud and Credit Card Fraud.
2013 Survey
What do you view as the top 5 EMERGING
fraud methods GLOBALLY?
0%
2%
4%
6%
8%
10%
14%
12%
PBX Hacking
10%
Subscription Fraud
10%
VoIP Hacking
7%
Dealer Fraud
Account Takeover / Identity Take Over
12%
6%
2013 Survey
What do you view as the top 5 EMERGING
% of Total Responses
fraud types GLOBALLY?
0%
2%
4%
6%
8%
10%
12%
14%
International Revenue Share Fraud (IRSF)
10%
Roaming Fraud
9%
Interconnect Bypass (e.g. SIM box)
8%
Premium Rate Service
Domestic Revenue Share (DRSF)
14%
8%
In 2011, the top 5 fraud types were: PBX/VM Fraud, International Revenue
Share Fraud, Bypass Fraud, Arbitrage and Subscription Fraud.
2013 Survey
Fraud Methods in YOUR COMPANY
0%
Subscription Fraud
PBX Hacking
Account Takeover / Identity Take Over
VoIP Hacking
Dealer Fraud
Abuse of Service Terms & Conditions
Abuse of network, device or configuration weakness-…
Social Engineering
Stolen Credit Cards & Returned or Counterfeit Checks
Voicemail Hacking
Wangiri
Pre-Paid Equipment & Services
Phishing / Pharming (e.g. internet fraud)
SMS Faking or Spoofing
Network/IT Abuse (e.g. Internal fraud/employee theft)
Unauthorized abuse of access (e.g. Customer Care System)
Brand Name / Logo Abuse
Clip-on Fraud
Signalling Manipulation
Mobile Malware
Proxy Fraud
SIM Cloning
2%
4%
6%
8%
10%
12%
11%
10%
8%
8%
7%
6%
5%
4%
4%
4%
4%
4%
4%
3%
3%
3%
2%
2%
2%
2%
2%
1%
2013 Survey
Fraud Types in YOUR COMPANY
0%
Roaming Fraud
Wholesale Fraud
Premium Rate Service
Cable or Satellite
Hardware Reselling
Service Reselling (e.g: Call Sell)
IMEI Reprogramming
Arbitrage
Theft / Compromise of data (e.g. logins)
Interconnect Bypass (e.g. SIM box)
International Revenue Share Fraud (IRSF)
Payment Fraud
Theft of Content
Denial of Service (DoS) and Distributed Denial of Service (DDoS)
Theft / Stolen Goods
Commissions Fraud
Private Use
Domestic Revenue Share (DRSF)
Spamming
2%
4%
6%
8%
10%
12%
14%
13%
11%
10%
8%
6%
6%
6%
5%
5%
4%
4%
4%
4%
3%
3%
3%
3%
2%
2%
2013 Survey
Top 10 Countries That ORIGINATE Fraudulent Calls:
8%
7%
7%
% of Responses
6%
5%
4%
3%
4%
4%
3%
3%
3%
3%
2%
1%
0%
The top 3 countries remained unchanged from 2011.
3%
3%
2%
2013 Survey
Top 10 Countries Where Fraud TERMINATES:
10%
10%
9%
8%
8%
7%
% of Responses
7%
6%
6%
6%
5%
4%
4%
Cuba
East
Timor
4%
4%
4%
4%
3%
2%
1%
0%
Latvia
Gambia
Somalia
Sierra
Leone
Guinea
Lithuania
Taiwan
United
Kingdom
Cuba was the top response in 2011, showing a shift from Call Sell fraud to
IRSF fraud
2013 Survey
Over the past 12 months, do you think GLOBAL
fraud losses have trended up, trended down, or stayed
the same?
80.0%
70.5%
70.0%
% of Responses
60.0%
50.0%
65.2%
59.0%
47.2%
37.4%
40.0%
30.0%
20.5%
20.5%
32.6%
23.0%
15.4%
20.0%
10.0%
2.2%
6.6%
0.0%
Trended UP
Trended DOWN
2005
2008
2011
Stayed the SAME
2013
2013 Survey
Over the past 12 months, has fraud IN YOUR
COMPANY trended up, trended down, or stayed
the same?
70.0%
64.4%
60.0%
% of Responses
52.5%
50.0%
40.0%
43.1%
40.0%
35.4%
39.3%
35.0%
30.0%
25.0%
24.4%
21.5%
20.0%
11.1%
10.0%
8.2%
0.0%
Trended UP
Trended DOWN
2006
2009
2011
Stayed the SAME
2013
Note: In 2013 90+% of CSPs reported fraud had increased or stayed the same.
2013 Survey
What percentage of bad debt is a result of fraud
in YOUR COMPANY?
70.0%
63.8%
% of Responses
60.0%
50.0%
40.0%
30.0%
22.4%
20.0%
6.9%
10.0%
5.2%
0.0%
1.7%
0.0%
< 10%
10-20%
21-30%
31-40%
41-50%
In 2013 some CSPs reported >50% bad debt related to fraud
> 50%
2013 Survey
What percentage of the total GLOBAL telecom
revenue base do you think is fraud?
30%
26.3%
% of Responses
25%
20%
17.5%
15.8%
15%
12.3%
10.5%
8.8%
10%
8.8%
5%
0%
< 1%
1-2%
2-3%
3-4%
4-5%
5-10%
> 10%
In 2011 27% believed fraud losses were 4-5%, 13% believed they were 5-10%,
and 0% believed they were more than 10%.
2013 Survey
What percentage of YOUR COMPANY’S
revenue base do you think is fraud?
50%
45%
45.6%
% of Responses
40%
35%
30%
24.6%
25%
20%
15%
12.3%
10.5%
10%
5%
1.8%
3.5%
1.8%
0%
< 1%
1-2%
2-3%
3-4%
4-5%
5-10%
> 10%
In 2011 14% believed fraud losses were 4-5%, 5% believed they were 5-10%,
and 0% believed they were more than 10%.
2013 Survey
Comparison Between 2008, 2011 and 2013
Survey Results in YOUR COMPANY
50%
46% 46%
45%
% of Responses
40%
35%
30%
25%
23%
20%
23%
15%
15%
27%
25%
13%
11%
12%
14%
12%
10%
5%
11%
10%
2% 2%
4%
5%
0% 0%
2%
0%
< 1%
1-2%
2-3%
2008
3-4%
2011 2013
4-5%
5-10%
> 10%
2013 Survey
Of the global telecom revenue base, what
percentage do you think is fraud in YOUR COMPANY?
Fraud Losses by Region
16%
14%
12%
% of Responses
10%
8%
6%
4%
2%
0%
Asia
South
Pacific
< 1%
Central and
South
America
1-2%
North
America
2-3%
3-4%
Western
Europe
4-5%
Eastern
Europe
5-10%
> 10%
Africa
Middle
East
2013 Global Fraud Loss Estimate
Of the global telecom revenue base, what
percentage do you think is fraud?
Fraud Losses by Size
18%
16%
% of Responses
14%
12%
10%
8%
6%
4%
2%
0%
< 1%
1-2%
<1,000,000
10,000,001 to 50,000,000
50,000,001 +
2-3%
3-4%
4-5%
5-10%
> 10%
1,000,001 to 10,000,000
25,000,001 to 50,000,000
Wholesale Only (no end user subscribers)
CSPs with 1-10M subscribers reported the most fraud losses. In 2011 CSPs
with 50M+ subscribers reported 34% fewer fraud losses.
2013 Survey
Of the global telecom revenue base, what
percentage do you think is fraud?*
Fraud Losses by # of Subscribers
Fraud
Loss as a
% of
Revenue
1,000,001 10,000,001 25,000,001
to
to
to
<1,000,000 10,000,000 50,000,000 50,000,000 50,000,001+ Wholesale
% Total
Responses
Adjusted
Weights
< 1%
9.34%
15.38%
8.24%
6.59%
3.85%
2.20%
45.60%
70.0%
1-2%
5.04%
8.30%
4.45%
3.56%
2.07%
1.19%
24.60%
23.3%
2-3%
2.52%
4.15%
2.22%
1.78%
1.04%
0.59%
12.30%
14.0%
3-4%
0.37%
0.61%
0.33%
0.26%
0.15%
0.09%
1.80%
9.7%
4-5%
0.72%
1.18%
0.63%
0.51%
0.30%
0.17%
3.50%
7.8%
5%-10%
2.15%
3.54%
1.90%
1.52%
0.89%
0.51%
10.50%
4.7%
> 10%
0.37%
0.61%
0.33%
0.26%
0.15%
0.09%
1.80%
3.4%
*Note: Percentages taken from losses reported by the CSPs occurring in their own
companies.
2013 Survey
2013 Estimated Global Telecom Revenues*:

$2.214 Trillion (USD)
2013 Estimated Global Loss:

$46.3 Billion (USD), or 2.09%
Loss Calculation:
∑((CSP Size x % by Group) x Group Midpoint)/100) x
Global Telecom Revenues
Notes:
 Fraud loss weights based on CSP size helps avoid bias created
when small and large CSP responses are combined.
*Source: The Insight Research Corporation – http://www.insight-corp.com/reports/review13.asp
(Estimate for 2013)
2013 Survey
Comparison to Previous Surveys
Estimated Global
Revenues
2005
$1.2 Trillion
(USD)
2008
$1.7 Trillion
(USD)
2011
$2.1 Trillion
(USD)
2013
$2.2 Trillion
(USD)
Estimated Global
Fraud Loss
$61.3 Billion
(USD)
$60.1 Billion
(USD)
$40.1 Billion
(USD)
$46.3 Billion
+15.4%
(USD)
5.11%
3.54%
1.88%
% Loss*
$2,500,000
6%
$2,000,000
5%
$1,500,000
4%
$1,000,000
3%
+3.7%
+0.21%
2%
$500,000
$0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Est. Global Telecom Revenues
2.09%
% Var
Est. Global Fraud Loss
1%
0%
2005
2008
2011
2013
In 2013, growth in global revenue outpaced reported fraud losses. However, as
a percent of revenue, fraud is growing at a faster rate than in 2011.
*Note: In 2011 losses were recalculated using a new methodology
2013 Global Fraud Loss Estimate
2013 Estimated Fraud Losses by CSP Type
(in $ USD Billions)
$5.84 ; 12%
$7.25 ; 16%
$2.64 ; 6%
Pre-paid Mobile
$2.86 ; 6%
$6.35 ; 14%
Post-paid Mobile
Fixed Line Services
Cable & Satellite
$9.92 ; 21%
Wholesale
Internet
Other
$11.52 ; 25%
2013 Global Fraud Loss Estimate
2013 Estimated Fraud Losses by Service Type
(in $ USD Billions)
Voice (Examples: Local, Long
Distance, & International)
$8.14 ; 18%
$6.98 ; 15%
$5.98 ; 13%
Data (Examples: VoIP & Over-theTop, other alternate communication
services...)
Financial (Examples: mobile
purchase & eCommerce)
$11.80 ; 25%
Content (Examples: IPTV,
Advertising, etc.)
$13.46 ; 29%
Machine-to-Machine (Examples:
Smart Meters, Cars, Sensors...)
2013 Survey
2013 Estimated Fraud Losses by Method
(in $ USD Billions)
Account Takeover /
Identity Take Over; $3.6
VoIP Hacking; $3.6
Dealer Fraud; $3.3
Abuse of Service Terms &
Conditions; $2.7
Abuse of network, device or
configuration weakness; $2.5
PBX Hacking; $4.4
Social Engineering; $2.0
Subscription Fraud; $5.2
Stolen Credit Cards &
Returned or Counterfeit
Checks; $2.0
Wangiri; $2.0
SIM Cloning;
$0.5
Voicemail Hacking; $2.0
Proxy Fraud; $0.8
Mobile Malware; $0.8
Signalling Manipulation;
$0.9 Clip-on Fraud; $0.9
Brand Name / Logo
Abuse; $1.1 Unauthorized abuse of
access (e.g. Customer
Care System); $1.2
Pre-Paid Equipment &
Services; $1.9
SMS Faking or Spoofing; $1.6
Network/IT Abuse (e.g. Internal
fraud/employee theft); $1.3
Phishing / Pharming (e.g.
internet fraud); $1.7
2013 Survey
2013 Estimated Fraud Losses by Type
(in $ USD Billions)
Premium Rate Service; $4.7
Cable or Satellite;
$3.5
Wholesale Fraud; $5.3
Hardware Reselling; $3.0
Service Reselling
(e.g: Call Sell); $2.8
Roaming Fraud; $6.1
IMEI Reprogramming; $2.6
Arbitrage; $2.2
Spamming;
$0.8
Domestic
Revenue
Share
(DRSF); $0.8
Private Use; $1.2
Theft / Compromise of data
(e.g. logins); $2.2
Commissions Fraud; $1.2
Theft / Stolen Goods; $1.4
Denial of Service (DoS) and
Distributed Denial of Service
Theft of Content; $1.8
(DDoS); $1.4
Payment Fraud; $1.8
Interconnect Bypass (e.g.
SIM box); $2.0
International Revenue
Share Fraud (IRSF); $1.8
2013 Survey
Estimated Fraud Losses by Method by Size
<1,000,000
1,000,001 to
10,000,000
10,000,001 to
50,000,000
25,000,001 to
50,000,000
50,000,001 +
Wholesale Only
(no end user subs)
$0.52
$0.86
$0.46
$0.37
$0.21
$0.12
Abuse of Service Terms & Conditions
Account Takeover / Identity Take Over
Brand Name / Logo Abuse
$0.55
$0.74
$0.22
$0.90
$1.22
$0.36
$0.48
$0.65
$0.19
$0.39
$0.52
$0.15
$0.23
$0.30
$0.09
$0.13
$0.17
$0.05
Clip-on Fraud
$0.19
$0.32
$0.17
$0.14
$0.08
$0.05
Dealer Fraud
Mobile Malware
$0.69
$0.16
$1.13
$0.27
$0.60
$0.15
$0.48
$0.12
$0.28
$0.07
$0.16
$0.04
Network/IT Abuse (e.g. Internal
fraud/employee theft)
$0.27
$0.45
$0.24
$0.19
$0.11
$0.06
PBX Hacking
Phishing / Pharming (e.g. internet fraud)
Pre-Paid Equipment & Services
Proxy Fraud
Signalling Manipulation
SIM Cloning
SMS Faking or Spoofing
Social Engineering
$0.91
$0.36
$0.38
$0.16
$0.19
$0.11
$0.33
$0.41
$1.49
$0.59
$0.63
$0.27
$0.32
$0.18
$0.54
$0.68
$0.80
$0.31
$0.34
$0.15
$0.17
$0.10
$0.29
$0.36
$0.64
$0.25
$0.27
$0.12
$0.14
$0.08
$0.23
$0.29
$0.37
$0.15
$0.16
$0.07
$0.08
$0.05
$0.14
$0.17
$0.21
$0.08
$0.09
$0.04
$0.05
$0.03
$0.08
$0.10
Stolen Credit Cards & Returned or
Counterfeit Checks
$0.41
$0.68
$0.36
$0.29
$0.17
$0.10
Subscription Fraud
$1.07
$1.76
$0.94
$0.75
$0.44
$0.25
Unauthorized abuse of access (e.g.
Customer Care System)
$0.25
$0.41
$0.22
$0.17
$0.10
$0.06
Voicemail Hacking
VoIP Hacking
Wangiri
Total
$0.41
$0.74
$0.41
$9.49
$0.68
$1.22
$0.68
$15.63
$0.36
$0.65
$0.36
$8.37
$0.29
$0.52
$0.29
$6.70
$0.17
$0.30
$0.17
$3.91
$0.10
$0.17
$0.10
$2.23
Fraud Method
Abuse of network, device or configuration
weakness
(In Billions $ USD)
2013 Survey
Estimated Fraud Losses by Fraud Type by Size
<1,000,000
$0.44
1,000,001 to
10,000,000
$0.73
10,000,001 to
50,000,000
$0.39
25,000,001 to
50,000,000
$0.31
50,000,001 +
$0.18
Wholesale Only
(no end user subs)
$0.10
Cable or Satellite
$0.73
$1.20
$0.64
$0.51
$0.30
$0.17
Commissions Fraud
Denial of Service (DoS) and
Distributed Denial of Service
(DDoS)
Domestic Revenue Share (DRSF)
$0.24
$0.40
$0.21
$0.17
$0.10
$0.06
$0.28
$0.47
$0.25
$0.20
$0.12
$0.07
$0.16
$0.27
$0.14
$0.11
$0.07
$0.04
Hardware Reselling
$0.61
$1.00
$0.53
$0.43
$0.25
$0.14
IMEI Reprogramming
$0.52
$0.86
$0.46
$0.37
$0.22
$0.12
Interconnect Bypass (e.g. SIM box)
International Revenue Share Fraud
(IRSF)
Payment Fraud
$0.40
$0.67
$0.36
$0.29
$0.17
$0.10
$0.36
$0.60
$0.32
$0.26
$0.15
$0.09
$0.36
$0.60
$0.32
$0.26
$0.15
$0.09
Premium Rate Service
$0.97
$1.60
$0.86
$0.68
$0.40
$0.23
Private Use
$0.24
$0.40
$0.21
$0.17
$0.10
$0.06
Roaming Fraud
$1.25
$2.06
$1.10
$0.88
$0.52
$0.29
Service Reselling (e.g: Call Sell)
$0.57
$0.93
$0.50
$0.40
$0.23
$0.13
Spamming
Theft / Compromise of data (e.g.
logins)
Theft / Stolen Goods
$0.16
$0.27
$0.14
$0.11
$0.07
$0.04
$0.44
$0.73
$0.39
$0.31
$0.18
$0.10
$0.28
$0.47
$0.25
$0.20
$0.12
$0.07
Theft of Content
$0.36
$0.60
$0.32
$0.26
$0.15
$0.09
Wholesale Fraud
$1.09
$1.80
$0.96
$0.77
$0.45
$0.26
Total
$9.49
$15.63
$8.37
$6.70
$3.91
$2.23
Fraud Type
Arbitrage
(In Billions $ USD)
2013 Survey
Estimated Fraud Losses by Method by Region
Western
Europe
Eastern
Europe
Africa
Middle East
$0.73
$0.81
$0.28
$0.22
$0.17
$0.06
$0.77
$0.85
$0.29
$0.24
$0.18
$0.08
$0.08
$1.03
$1.15
$0.40
$0.32
$0.24
$0.02
$0.02
$0.07
$0.02
$0.02
$0.02
$0.07
$0.02
$0.31
$0.27
$0.96
$0.23
$0.34
$0.30
$1.07
$0.26
$0.12
$0.10
$0.37
$0.09
$0.09
$0.08
$0.29
$0.07
$0.07
$0.06
$0.22
$0.05
$0.12
$0.03
$0.03
$0.38
$0.43
$0.15
$0.12
$0.09
$0.39
$0.10
$0.10
$1.26
$1.41
$0.49
$0.39
$0.29
$0.15
$0.04
$0.04
$0.50
$0.55
$0.19
$0.15
$0.11
Pre-Paid Equipment & Services
$0.16
$0.04
$0.04
$0.54
$0.60
$0.21
$0.16
$0.12
Proxy Fraud
Signalling Manipulation
SIM Cloning
SMS Faking or Spoofing
Social Engineering
Stolen Credit Cards & Returned or
Counterfeit Checks
Subscription Fraud
Unauthorized abuse of access (e.g.
Customer Care System)
Voicemail Hacking
VoIP Hacking
Wangiri
Total
$0.07
$0.08
$0.05
$0.14
$0.18
$0.02
$0.02
$0.01
$0.04
$0.04
$0.02
$0.02
$0.01
$0.04
$0.04
$0.23
$0.27
$0.15
$0.46
$0.57
$0.26
$0.30
$0.17
$0.51
$0.64
$0.09
$0.10
$0.06
$0.18
$0.22
$0.07
$0.08
$0.05
$0.14
$0.18
$0.05
$0.06
$0.04
$0.11
$0.13
$0.18
$0.04
$0.04
$0.57
$0.64
$0.22
$0.18
$0.13
$0.46
$0.11
$0.11
$1.49
$1.66
$0.57
$0.46
$0.34
$0.11
$0.03
$0.03
$0.34
$0.38
$0.13
$0.11
$0.08
$0.18
$0.32
$0.18
$4.07
$0.04
$0.08
$0.04
$1.02
$0.04
$0.08
$0.04
$1.02
$0.57
$1.03
$0.57
$13.24
$0.64
$1.15
$0.64
$14.76
$0.22
$0.40
$0.22
$5.09
$0.18
$0.32
$0.18
$4.07
$0.13
$0.24
$0.13
$3.05
Fraud Method
Abuse of network, device or
configuration weakness
Central and
South America North America
Asia
South Pacific
$0.22
$0.06
$0.06
Abuse of Service Terms & Conditions
$0.24
$0.06
Account Takeover / Identity Take Over
$0.32
Brand Name / Logo Abuse
Clip-on Fraud
Dealer Fraud
Mobile Malware
Network/IT Abuse (e.g. Internal
fraud/employee theft)
PBX Hacking
Phishing / Pharming (e.g. internet
fraud)
$0.09
$0.08
$0.29
$0.07
(In Billions $ USD)
2011 Survey
Estimated Fraud Losses by Fraud Type by Region
Central and
South America North America
$0.05
$0.62
Western
Europe
$0.69
Eastern
Europe
$0.24
Africa
$0.19
Middle East
$0.14
$1.01
$1.13
$0.39
$0.31
$0.23
$0.03
$0.34
$0.38
$0.13
$0.10
$0.08
$0.03
$0.03
$0.39
$0.44
$0.15
$0.12
$0.09
$0.07
$0.02
$0.02
$0.23
$0.25
$0.09
$0.07
$0.05
Hardware Reselling
$0.26
$0.06
$0.06
$0.84
$0.94
$0.32
$0.26
$0.19
IMEI Reprogramming
$0.23
$0.06
$0.06
$0.73
$0.82
$0.28
$0.23
$0.17
Interconnect Bypass (e.g. SIM box)
$0.17
$0.04
$0.04
$0.56
$0.63
$0.22
$0.17
$0.13
$0.16
$0.04
$0.04
$0.51
$0.57
$0.19
$0.16
$0.12
$0.16
$0.04
$0.04
$0.51
$0.57
$0.19
$0.16
$0.12
Premium Rate Service
$0.42
$0.10
$0.10
$1.35
$1.51
$0.52
$0.42
$0.31
Private Use
$0.10
$0.03
$0.03
$0.34
$0.38
$0.13
$0.10
$0.08
Roaming Fraud
$0.54
$0.13
$0.13
$1.75
$1.95
$0.67
$0.54
$0.40
Service Reselling (e.g: Call Sell)
$0.24
$0.06
$0.06
$0.79
$0.88
$0.30
$0.24
$0.18
Spamming
Theft / Compromise of data (e.g.
logins)
Theft / Stolen Goods
$0.07
$0.02
$0.02
$0.23
$0.25
$0.09
$0.07
$0.05
$0.19
$0.05
$0.05
$0.62
$0.69
$0.24
$0.19
$0.14
$0.12
$0.03
$0.03
$0.39
$0.44
$0.15
$0.12
$0.09
Theft of Content
$0.16
$0.04
$0.04
$0.51
$0.57
$0.19
$0.16
$0.12
$0.47
$0.12
$0.12
$1.52
$1.70
$0.58
$0.47
$0.35
$4.07
$1.02
$1.02
$13.24
$14.76
$5.09
$4.07
$3.05
Fraud Type
Arbitrage
Asia
$0.19
South Pacific
$0.05
Cable or Satellite
$0.31
$0.08
$0.08
Commissions Fraud
$0.10
$0.03
Denial of Service (DoS) and
Distributed Denial of Service (DDoS)
$0.12
Domestic Revenue Share (DRSF)
International Revenue Share Fraud
(IRSF)
Payment Fraud
Wholesale Fraud
Total
(In Billions $ USD)
2013 Survey
Fraud Method Definitions:
Fraud Method
Description
Abuse of network, device or configuration
weakness--Exploitation of a configuration
Exploitation of a configuration weakness to gain access to a network or device
weakness to gain access to a network or device
Abuse of Service Terms & Conditions
Account Takeover / Identity Take Over
Brand Name / Logo Abuse
Clip-on Fraud
Dealer Fraud
Mobile Malware
Violation of the carrier's service terms and conditions or acceptable use policy
Use of identity information (real or synthetic ID theft) to obtain a new account or to gain access to an
existing account
Acquisition and use of a company's logo without permission
Stealing service by attaching wires to another customer's phone equipment
All types of fraud conducted by indirect and 3rd party dealers
Compromised mobile applications
Network/IT Abuse (e.g. Internal fraud/employee
Theft of service or equipment by employees
theft)
PBX Hacking
Compromised PBX systems used to make calls
Phishing / Pharming (e.g. internet fraud)
Stealing bandwidth, hacking, phishing, vishing, etc.
Pre-Paid Equipment & Services
Proxy Fraud
Signalling Manipulation
SIM Cloning
SMS Faking or Spoofing
Social Engineering
Stolen Credit Cards & Returned or Counterfeit
Checks
Subscription Fraud
Unauthorized abuse of access (e.g. Customer
Care System)
Voicemail Hacking
VoIP Hacking
Wangiri
All types of fraud and abuse involving pre-paid equipment and services
Manipulation of the IP address to hide someone's true origination or identity
Manipulation of the SIP or SS7 signaling message to hide the true origination or identity of a caller
Duplicated SIM card used to charge phone calls back to the original SIM card
Manipulation of the ANI to hide the true origination or identity of the caller
Manipulation of an employee or customer to unintentionally give out important information
All types of fraud involving stolen credit cards, returned or counterfeit checks
Use of service with no intent to pay
Unauthorized abuse of company's credit and adjustment policy
Compromised Voicemail systems used to make calls
Compromised VoIP equipment such as an IP PBX or Modem used to make fraudulent calls
Call-back fraud schemes
2013 Survey
Fraud Type Definitions:
Fraud Type
Description
Arbitrage
Exploitation of the differences in rates between different countries
Cable or Satellite
Commissions Fraud
Denial of Service (DoS) and
Distributed Denial of Service
(DDoS)
Domestic Revenue Share
(DRSF)
Hardware Reselling
Signal theft or retransmission from a cable or satellite provider
Schemes used by dealers to collect additional commissions and spiffs
IMEI Reprogramming
Changing the IMEI of a handset to hide the true origination or identity of a caller
Interconnect Bypass (e.g. SIM
box)
International Revenue Share
Fraud (IRSF)
Payment Fraud
Premium Rate Service
Private Use
Roaming Fraud
Service Reselling (e.g: Call
Sell)
Spamming
Theft / Compromise of data
(e.g. logins)
Theft / Stolen Goods
Theft of Content
Wholesale Fraud
Unauthorized insertion of traffic onto another carriers’ network. This includes Interconnect Fraud and GSM
Gateway Fraud or SIM Boxing.
An explicit attempt to make a machine or network resource unavailable to the users of a service
Abuse of Carrier Interconnect agreements through such things as Traffic Pumping, Switch Access Stimulation,
8yy Dip Pumping & CNAM Revenue pumping schemes
Resold handsets or equipment
Artificial inflation of traffic terminating to international revenue share providers
Includes items such as charge-backs, returned checks, card holder not present, etc.
Artificial inflation of traffic terminating to premium service providers
Use of a service neither directly nor indirectly paid for without rendering some kind of financial compensation
All types of fraud and abuse involving roaming
Resale of stolen phone service to other people
Use of electronic messaging systems to send unsolicited bulk messages
Includes such things as the acquisition of personal information or intellectual property
Equipment Theft
Stealing content such as ringtones, games, or applications
Exploitation of wholesale interconnect agreements
About Communications Fraud
Communications fraud is the use of telecommunications products
or services with no intention of payment. Fraud negatively impacts
everyone, including residential and commercial customers. The
losses increase the communications carriers’ operating costs.
Although communications operators have increased measures to
minimize fraud and reduce their losses, criminals continue to
abuse communications networks and services. Therefore,
communications operators tend to keep their actual loss figures
and their plans for corrective measures confidential. Due to the
sensitive nature of this topic, CFCA used a confidential opinion
survey of global communications operators to support the global
fraud loss study.
About CFCA
CFCA is a not-for-profit global educational association that is
working to combat communications fraud. The mission of the
CFCA is to be the premier international association for revenue
assurance, loss prevention and fraud control through education
and information. By promoting a close association among
telecommunications fraud security personnel, CFCA serves as a
forum and clearinghouse of information pertaining to the
fraudulent use of communications services. For more
information, visit CFCA at www.CFCA.org.
Communications Fraud Control Association
4 Becker Farm Road 4th Floor
PO BOX 954
Roseland, NJ 07068
+1 973 871 4032 Phone
+1 973 871 4075 Fax
[email protected] email
www.cfca.org website
Roberta Aronoff – Executive Director