Pssst. Hey, did anyone know that the wireless industry has a problem with fraud? If you didn’t, it’s because it’s taken seven years for carriers and manufacturers to talk frankly and openly about cloning, RF fingerprinting and subscription fraud in front of the press and everyone. According to CTIA’s Tom Wheeler, the numbers finally are on the retreat. Fraud has turned the corner and is out of the closet.
Truth is, operators have kept the lid on fraud talk since at least 1990, in part because they feared a mass subscriber exodus if they knew how prevalent cloning was. It was a competitive issue and, in some respects, it still is. However, now that electronic fraud has been cured by a combination of authentication and RF fingerprinting, lips have loosened.
Suddenly, hot-spot cities are being named and lost-revenue amounts are being revealed. Public-safety investigators have come out from undercover to expose fraudsters on videotape. And the Secret Service is sharing its secrets. It’s a good thing.
Moving forward, there is a more insidious form of fraud to bust-subscription fraud, where your identity can be pulled out of thin air, much like the phone numbers upon which crooks used to depend. However, instead of just having a 10-pound bill delivered to your door as proof of calls you never made, your credit rating could go down the dumper. As one speaker at last week’s Wireless Fraud ’97 workshop put it, “You can mess with my phone, but don’t mess with my credit.” Even digital carriers need to worry about this issue.
So what to do? Carriers in top markets are gearing up to perform increased front-end due diligence, and smaller carriers will follow suit once they feel the pressure from their neighbors or experience a dent in their bottom lines. Many have pledged to work with each other to trade subscriber information, but that cooperation remains to be seen. Names and numbers have been a proprietary, jealously guarded prize, and the thought of sharing could be too much for some. If one carrier has fraud safeguards in place and its competitor doesn’t, isn’t that a marketing issue to be exploited in full-page ads?
CTIA always has carried the flag when it comes to fraud issues, working with all facets of the public and private sectors to educate all who wish to be of the business and personal dangers this practice in all its incarnations. One of the hardest selling jobs it may face in the near future is to get its constituency to hold hands and sing “Kumbayah” and mean it.
