FRAUD AND REVENUE RISK CONSULTING

Revenue Leakage in the Telecom industry is 1% to 11% of gross revenues (source: TM Forum). In an organisation where the Revenue Assurance function is quite limited in capability and resources, it would be reasonable to assume that at the lower end of this scale, at 3-4%, the opportunity to avoid considerable losses through improved processes, procedures and systems is significant.

The situation is similar with Fraud losses, which are often in the region of 1 to 5% of gross revenues. While occasionally fraud losses could be considered simply unpaid use of an organisations network and services, most do result in a direct impact on the organisations bottom line. These losses could be in the form of out-payments to interconnect or content partners, loss of incoming interconnect or termination revenue or simply the loss of return on the investment required to provide services.

More and more telecom operators have come to appreciate the importance of assuring all available revenues and conducting regular fraud and revenue risk reviews is now common.  We are now in an operating environment where we are experiencing eroding margins, increased cost pressure and an increasingly competitive marketplace. The realisation that every dollar recovered from leakage , or prevented from becoming leakage flows directly to the bottom line, makes the argument for implementing effective  Fraud and Revenue Risk processes and tools more and more compelling.

Many start-up’s, whether they are an MNO or MVNO, will frequently concentrate their activities on establishing their business to a stage where they can offer services and establish their customer base. This often results in basic risk management initiatives, including Fraud, Revenue Risk and Revenue Assurance controls being overlooked, or as issues that can be dealt with at a later time, once the business is more established. This strategy has resulted in many start-up operations suffering fraud or other avoidable losses that have almost destroyed the business, and generally result from some control or fraud prevention/detection weakness that would not have existed had even a basic fraud risk review been completed before, or shortly after launch. 

YFCL have performed several Fraud and Revenue Risk reviews around the world over the past 5 years or so, however in the ‘Post Covid’ era, these are no longer provided, because of the restrictions on travel. We would however encourage all CSP’s, particularly those who are in the first one or two years of operation, or who have an immature Fraud and Revenue Assurance function, to still arrange for a risk and revenue assurance review to be completed. Our experience has been that these are invaluable to ensure that all weaknesses and vulnerabilities are identified and secured before they are exploited by fraudsters.

While the principal activity of YFCL now is to manage, update and maintain the PRISM IPRN Database, other investigative and analytical services are still being provided, as long as these can be completed remotely (without travel out of New Zealand).

The most common activity we are now involved in is being contracted to analyse call records of an IRSF incident to identify all of the fraud indicators to find sufficient evidence to satisfy a Law Enforcement or Prosecuting Agency that a fraud has been committed, along with any information that could identify the party responsible for providing the numbers used in that fraud. Over 50 of these investigations have been completed over the past 3 years, with over 80% of them finding sufficient evidence that a fraud had been committed along with avenues of enquiry for the investigating agencies.

Contact Colin Yates (colin@yatesfraudconsulting.com) if you have an IRSF or other fraud incident where you would like call records examined and analysed for evidential purposes, and we will try to have a full proposal returned to you within 48 hours, outlining the methodology used, deliverables, benefits and estimated costs.