Scam Calls as a Long-Standing Fraud Trend
Scam calls exist as a persistent problem for both communication service providers (CSPs) and their customers, with predicted losses of reaching USD 70 billion globally by 2027. That’s why Neural’s Technologies’ SCAMBlock solution is designed to actively monitor and block scam calls, reducing the risk to CSPs and tackling the cost of phone scams before they impact customers.
The prevalence of advanced technologies adoption has contributed lower cost and threshold than ever for scammers to defraud the phone users across the globe using sophisticated fraud techniques, such as Wangiri fraud and Caller ID Spoofing.
Fraudulent Call Attacks that You Must Be Aware
#1 Caller ID Spoofing
Call spoofing or number spoofing can be a severe problem for mobile users, as sophisticated fraudsters and scammers will trick them into believing that they are calling from a trusted number or location of authority. This may result in escalating costs, from being tricked into a single fraudulent payment right through to theft of personal and financial information, leading to even more critical losses.
#2 Fraudulent Automated Calls
Automated technologies nowadays allow bad actors to make literally millions of spam calls a day, casting a wide net that is certain to take in many vulnerable customers. The impact on customers successfully defrauded by the automated calls can be both financially and emotionally devastating.
#3 Robocalling Scam
According to the Federal Communications Commission, international robocalls are escalating in volume. A private study revealed that in the US alone, consumers received over 50.3 billion robocalls in 2022. That’s a significant and stark threat to customers.
The latest study from Juniper Research reveals that mobile subscribers will lose USD 58 billion to fraudulent robocalls globally in 2023, it’s clear that robocalls are a significant and rapidly growing problem for CSPs and customers worldwide.
The Cost of Inadequate Scam Calls Protection
Inadequate protection for customers doesn’t only create financial and emotional distress for the targeted ones. It may also cause a domino effect of consequences for communication service providers, which include reputational damage, significant revenue contribution dedicated to complaint and dispute management, and eventually evoking business downturn due to customer churning and reputational issues.
According to the Risk and Assurance Group (RAG) 2021 Digital Trust Survey of Revenue Assurance, Fraud Management and Cyber Security Professionals Working for Communication Service Providers, customers of CSPs experienced USD 28.55 billion in annual losses due to fraud.
This loss indicates the remarkable harm of scam calls and scammers in the modern landscape. The report also clearly shows that revenue losses to CSPs fail to demonstrate the devastating impact to their customers.
“Relaxed attitudes towards operating risk leave customers hassled by scammers who use automation to make billions of unwanted calls and messages.” notes the RAG RAFMCS 2021 report.
In this regard, fraud risk management with respect to fraudulent phone scams is essential for CSPs to avoid financial and reputational damage. CSPs should take more actions like implementing proactive fraud risk management in order to tackle mobile related fraud risks.
Doing More to Tackle Scam Calls
A reported USD 2.83 billion is spent compensating victims of fraud according to RAG’s 2021 report, but at less than 10% of the total loss to customers, that represents just a small share of the true financial cost.
This compensation cost is another clear reason for CSPs to tackle fraud before it affects users. Combining this figure with the cost to customers indicates a USD 31.38 billion leakage due to fraud which must be addressed. What’s perhaps more difficult to assess is what the total cost of fraud truly might be, because all evidence shows that the cost of fraud is bigger than what you think due to the under-reporting and incomplete analysis.
RAG makes clear in its own report that the total cost of USD 31.83 billion is an estimate based on the best possible data they can collect. They also note concern that many fraud risk managers may not even know the true cost of fraud to customers of their respective organizations.
Indicators such as number of customer complaints, identified fraud, and fraud cited as a reason for leaving a company are hailed as key indicators which may present a fuller picture of this threat. It’s clear that by the time these types of indicators are identified, it’s already too late for customers.
Neural Technologies’ SCAMBlock Solution
SCAMBlock from Neural Technologies is designed to tackle scam calls before they impact customers. It utilizes a multi-layered threat detection and prevention technique, leveraging our machine learning capabilities to meet evolving fraud threats. High-risk fraud characteristics are identified through link and correlation analysis which displays the characteristics of fraudulent behavior, which in turn feeds back into AI and Machine Learning solutions as part of an iterative learning loop that keeps SCAMBlock updated to recognize latest fraud trends and threats.
This solution helps prevent phone scam from reaching customers, stopping bad actors at the source before the first fateful ring of a telephone. When it comes to protecting both CSPs and customers from the cost of fraud, that’s the only way to deliver the best possible outcome that reduces fraud risks, and keeps customers safe.