Fraud costs customers of communication service providers (CSPs) an estimated USD48 billion annually according to a 2020 report by the Risk & Assurance Group (RAG). Scam calls are a major part of that challenge.
The menace of phone scams is more than just a revenue risk for CSPs, it’s a major threat to their customers, with successful cases of fraud triggering significant financial hardship. This is particularly true for more vulnerable or elderly customers, who are most likely to be susceptible to such fraud attempts.
A 2018 study identified robocalls as a particularly persistent threat, with 7 billion of these calls made to customers around the world every single month. Neural Technologies’ new Scam Call Mitigation Solution is designed to tackle this threat. But equally important will be educating customers as to the risks.
In order to build a safer and more informed communication landscape, we’ve put together a list of the five key fraud threats and risks identified for automated calls.
Bank Account Scam
This simple but dangerously effective fraud type involves tricking customers into releasing sensitive information about their financial accounts to a fake caller.
Fraudsters call a victim pretending to be a representative of a bank, often with urgent communication about suspicious activity that inspires a need to act. The scammer will trick the customer into revealing personal information that allows them to directly access the bank account. At that point they simply log onto the account and transfer money through untraceable networks to profit from the victim’s savings.
This scam is particularly devastating as banks may well refuse to refund victims who voluntarily gave out their details to scammers. A recent UK study of what is domestically known as ‘bank transfer fraud’ revealed that more than half (53%) of victims were refused refunds in such cases.
This type of fraud is often reinforced using a call spoofing process which allows scammers to fake the number of the incoming call to customers. This means the customer sees an identifiable number they recognize from their bank, and are tricked into trusting the call as an official communication.
Wangiri fraud or ‘one-ring fraud’ is a long-established scam technique that remains popular with scammers.
The Wangiri scam works by targeting customers with short, single-ring calls that leave missed call notifications on a victim’s phone. Unfortunately for customers, the missed call is a scam designed to trick them into responding on a premium line number with inflated call costs. This is sometimes backed up by a recorded message on the return number that leads to customers holding calls for longer and racking up significantly higher charges.
Wangiri fraud isn’t just a threat to customer finances – the RAG RAFM Survey 2020 reveals CSPs globally spent USD1.31 billion compensating customers for Wangiri fraud in 2020.
Credit Card Scam
The credit card scam operates much like the bank account scam, with fraudsters targeting customers and attempting to trick them into revealing sensitive financial information.
A scammer will often phone attempting to ‘help’ the victim, phishing for information such as card details. There are even reports of scammers using more targeted techniques by phoning extension numbers in hotel rooms, pretending to be an employee of the hotel and looking to confirm credit card details.
Once the scammer has ended the call, they will then seek to use that information to either directly spend the victim’s funds, or set up a new account and draw credit against the individual’s own personal details.
The neighbor scam is a focused type of call spoofing which often uses voice-over-IP (VOIP) systems to fake the first few numbers of a phone number, tricking a recipient into believing it’s from a local location that can be more easily trusted. A customer is far more likely to answer a call if they (falsely) recognize the local area code.
With the local area code spoofing providing an avenue to victims, a scammer will then try and leverage some key personal or financial information and gain a profit through a variety of means.
Scam calls can sometimes take a more aggressive approach to fraud, playing on a victim’s fears and coercing them into handing over money in order to protect friends or family.
In this scenario, a scammer calls a number and upon answer they immediately threaten a family member. This could be a scenario such as claiming to have kidnapped, or threatening to kidnap, a family member unless a financial compensation is paid. Alongside the personal financial cost of fraud under such extortion attempts, these types of scams can cause significant personal anxiety.
Scam call mitigation is critical to CSPs
It’s clear that scammers are using varied and sophisticated methods to defraud customers. There are millions of calls every single day targeting customers around the world. It’s essential that CSPs embrace a proactive approach that tackles scam calls before they reach customers, rather than waiting to pick up the pieces once a scam has been effectively actioned.
Neural Technologies’ recently released Scam Call Mitigation Solution is designed to eliminate scam calls before customers are impacted, reducing exposure to financial loss while protecting the reputation of CSPs.
This leverages a multi-layered, end-to-end solution which evolves to meet the changing threats of scam calls. Link and correlation analysis identifies suggestive fraud characteristics and suspicious activity, while the machine learning-driven solution adapts to continuously update its scam call profile.
There’s no doubt that fraudsters are adapting to expose victims to new scam call threats. It’s imperative that telecoms operators adapt to keep pace with those risks. While the five scam call types outlined above represent the most persistent threats today, Neural Technologies’ Scam Call Mitigation Solution is designed to ensure customers are also protected against the threats of tomorrow.
Find out more about our Scam Call Mitigation Solution or download the brochure today.