Fraud Management - Dealer Fraud

Dealer fraud is perpetrated by a dealer or supplier with the intention of depriving the operator of revenue and increasing their own commission. This often includes false activation of accounts and the resale of equipment or services outside the terms and conditions of the contract.

This type of fraud is common in the telecoms and pay TV sectors where fraud types include: subscription fraud, commission abuse, equipment or upgrade fraud, product subsidy abuse/box splitting, promotion abuse and money laundering.

Simple checks will limit losses, for example:

• Number of daily and weekly activations
• Number of activations by customer category/subscription method
• New customers with zero or < 5 calls by dealer code
• Number of adjustments given by retailer
• Monitor dealers’ test handsets; these are often fully loaded with all services and may be being used out of hours without appearing on the billing system
• New connections where original SIM card is not used with the original handset
• Use lists from dealer or in-house reports to monitor returned handsets by hot listing these IMEIs
• Dealers removed from supplier lists should be monitored as a fraudulent dealer may try again
• Profile dealer together with high risk usage patterns for new activations

Best practice measures include analysing all fraud situations and acting accordingly; ensuring new and existing dealers’ activities are monitored; stating under terms and conditions that all activations will be stopped whilst a dealer is under investigation and producing a dealer code of conduct and enforcing by random reviews.

Neural Technologies offers dealer fraud management within its Minotaur fraud solution or as a low cost stand-alone module available via the cloud.

Download our Dealer Fraud fact sheet

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