Front-end fighters: Analysis of subscriber data can catch fraud criminals before they strike

Many criminals turn to their line of work partly because they lack the intelligence to get by through legal means, but the miscreants who perpetrate phone fraud keep at it by being smart, understanding the system, and evolving their scams as fast as law enforcement authorities and carriers can evolve their solutions.

A host of products and services aimed at combating phone fraud, most of which are based on data mining and rapid data analysis tools, give carriers a fighting chance. But if the anti-fraud system they choose can't adapt with the changing tactics of the criminals, carriers may lose even more money in this cat-and-mouse game.

The current trend is not toward technical fraud-tapping lines or cloning cellular accounts-but more toward subscription fraud, a form that may be caught only after several billing cycles have passed.

According to the Cellular Telecommunications Industry Association, special areas of concern are prepaid wireless plans and the hacking of switches and billing systems by increasingly sophisticated criminals. While most carriers have analysis tools that catch patterns of fraud after the fact and allow them to discontinue service and keep losses to a minimum, the swing toward subscription fraud gives carriers some hope.

Some vendors have strategies to catch subscription fraud before the activation of accounts, turning what has been a strategic battle of reducing overall losses to a tactical campaign of spotting fraud before it hurts the bottom line.

One common-sense approach is to analyze the data submitted by an applicant to ensure it makes sense. Lightbridge's Fraud Sentinel system uses front-end software to accomplish this. The system ensures that social security numbers match with birth dates, zip codes fit addresses and area codes jibe with the geographic locations of potential subscribers.

"The system has a component that uses internal logic in piecing information together to see if it all makes sense," said Tom Prosia, vice president of marketing for Lightbridge. "One really useful piece of information that Fraud Sentinel can catch at the front end is whether a driver's license number is proper for the state listed and whether the license is valid. A question with any of these bits of information raises a red flag and allows the service provider to investigate."

The front-end component is paired with a back-end profiler that examines switch records and other data to establish where patterns of fraud might occur.

Implementing such solutions should become easier once carriers begin to closely integrate network management and customer management systems, Prosia said. "That's exactly what the idea with Fraud Sentinel is-getting the back end and the front end to share information. The more often that occurs within a carrier's operation, the more easy it is to identify fraud and other network issues."

While the Lightbridge system is targeted at the wireless market, the technology eventually could find a home in the wireline market, Prosia said.

Regardless of which software is in place, however, carriers are still likely to take their lumps at the hands of crafty criminals.

"Nobody is foolproof, and there will still be write-offs regardless of how advanced the detection systems are," Prosia said. "The real issue is whether you want to catch it in 90 days or in three or four days. If you compare those costs, prevention systems with that front-end component make a lot of sense."

PARTNERSHIP SPREADS OPENVIEW Hewlett-Packard has launched a partnership with Hughes Network Systems that will extend the effectiveness of HP's OpenView network management platform. Hughes' Radiant Vision management product for internetworking edge switches and access devices has passed OpenView certification testing, and Hughes will become an OpenView Premier Partner.

CLEC SEEKS OSS SYMMETRY CT Communications, a CLEC based in Concord, N.C., is deploying MetaSolv Software's Telecom Business Solutions Suite. The software package is targeted at back office operational support and helps streamline order management, service provisioning, inventory and workflow management.