Premium Rate Service Fraud and IRSF together account for $6.5 billion in fraud losses, according to the CFCA fraud loss survey 2013. Both PRS Fraud and IRSF are similar in nature – in both cases fraudsters inflate traffic to certain numbers or number ranges which attract higher settlement payments from the operators – however, there is a subtle difference in the way each fraud is pulled off and strategies that should be adopted to detect and prevent them.
Premium Rate Service Fraud has been around for lot longer than IRSF. Historically the vast majority, if not all, of the PRS Fraud has been domestic (i.e. calls originating and terminating with the same country). The modus operandi is that fraudsters would acquire PRS numbers (e.g. chat lines, horoscope, news, gambling etc.) and inflate traffic to them with the knowledge that the telecom provider would pay them their ‘revenue share’ at the end of the month. As it takes a while for the operator to collect the money from the customer (usually at least 60 days), the elapsed time allowed the PRS fraudster to ‘disappear’ before being detected for fraud.
IRSF on the other hand uses assigned country numbers and rely on revenue generated from the terminating fee in to that country. Fraudsters receive a share of the revenue from termination charges obtained by the number range holder for inbound traffic to the number ranges. The numbers are usually international in nature unlike PRS numbers which are generally only accessed locally (i.e. within the same country).
There are some exceptions to this and that is where a number range owner allocates part of their number range for “content services”, and notify a new tariff for this range which will include both the termination fee (revenue share) and an additional ‘content’ charge (similar to premium rate charges). They may then provide these ranges to IPRN Providers (more appropriate name would be International Revenue Share Number Providers by the very nature that these numbers can be accessed internationally). The fraudsters then collude with the IPRN or IRS providers to inflate traffic to gain from the lucrative pay-outs (termination fee and content charges) from the interconnect operators.
Both Premium Rate Service Fraud and IRSF are commonly carried out in conjunction with Subscription Fraud or PBX Hacking. Subscription fraud is usually the primary fraud followed by secondary fraud such as PRS Fraud and IRSF. Some of the other tricks that fraudsters adopt to drive traffic to PRS numbers are sending ‘missed calls’ prompting the unassuming customer to call back only to realise later that it was to a premium rate number. Similar schemes are adopted through ‘SMS’ with a message asking the customer to contact a number urgently to receive a lucky draw payment or a free re-charge coupon. Again the customer is duped as the calls are directed to a premium rate number.
Detection and Prevention Methods:
PRS Fraud can be detected by monitoring for sudden or suspicious high volume calls to premium rate numbers or monitoring hot listed premium rate numbers for suspicious traffic. To prevent PRS Fraud, operators must have strong Application Fraud Prevention and Subscription Fraud Detection capabilities and strong settlement agreements with premium rate service providers.
IRSF is lot more difficult to detect as the numbers in IRSF are generally not part of the official national numbering plans so the originating operator cannot easily identify the called numbers as premium rate services and hence difficult to add them to monitoring hotlists.
Perpetrators of IRSF generally require testing a SIM or PBX device in their possession with test calls to a desired terminating country prior to generating revenue share traffic. These test numbers are widely advertised by the IPRN providers – some easy to obtain and some more difficult – but the numbers keep changing regularly. As part of our PRISM database solution to tackle IRSF, we monitor over 130 service providers advertising revenue share numbers. These ‘Test Numbers’ in conjunction with an operator’s existing alerting capabilities can be a useful weapon in the fight against IRSF.
In both cases, prevention is better than cure. Primary detection methods such as Application Fraud Prevention and a strong Subscription Fraud Detection can go a long way to prevent Premium Rate Service Fraud and IRSF losses.
Source: Compiled using expert input from Colin Yates of Yates Fraud Consulting and GSMA fraud forum notes.
About the Author: Shankar is a certified fraud examiner and is the Founder and CEO of Fraud Risk and Security Research Labs. Shankar has over 18 years of experience in developing complex intelligence and fraud prevention systems for Telecoms, Financial Institutions and Governments.