Fraud detection companies cash in, Separate deals highlight multifaceted approach to theft deterrence

Network security companies are capitalizing on an increasing need for more extensive antifraud measures.

Two announcements last week highlighted this growing market: Inet Inc. of Plano, Texas, and Coral Systems of Longmont, Colo., announced an alliance that will marry Coral's FraudBuster system to Inet's GeoProbe system; and Corsair Communications of Palo Alto, Calif., announced that GTE is deploying its Phoneprint cellular fraud prevention system in its Gulf Coast markets.

The announcements highlight the various fraud detection methods that carriers - both wireless and wireline - are turning to.

The Coral/Inet agreement involves a profiler system that collects data on users' calling patterns and recognizes unusual activity.

GeoProbe extracts information from SS7, which means instant data feeds. The system primarily has been used for billing and other functions, but the agreement with Coral adds instant fraud detection to its list of features.

The combination will be effective against both cloning and subscription fraud, said Kevin Keough, Inet's new business development vice president.

With conventional systems, carriers often need days or weeks to identify such schemes, but the Coral/Inet solution will let them minimize theft by acting sooner, Keough said.

By comparison, Corsair's Phoneprint uses wireless handsets' unique RF "fingerprints" to cut off cloned calls before charges are incurred. Corsair views its product as complementary to profiling systems, said Bill Taliaffero, Corsair's product marketing director. Phoneprint lets carriers reduce their staff and use profiling for more analytical purposes.

"Carriers with fraud problems generally have profilers, but they're swamped [with fraudulent activity]," Taliaferro said.

"Now you can use profiling to do case investigations to spot larger trends, maybe start a law enforcement effort and track down kingpins," Taliaferro said.