Mobile networks must stop relying on money from fraud – Expert

Head of Secure-D Geoffrey Cleaves has warned mobile networks against passively relying on fraud-based or “toxic” revenue.

Secure-D is Upstream’s proprietary mobile anti-fraud platform, combating mobile ad fraud at the operator level.

Speaking at the Global Carrier Billing Summit 2020, Cleaves warned against mobile network operators’ (MNOs) passive reliance on “toxic” fraud-based revenue streams, arguing they do far more harm than good in the long-term.

He described anti-fraud technology as being “essential” and “necessary” as MNOs continue to devise their digital transformation strategies.

“When we first started our implementation with a major South African operator, customer complaints were at an unacceptable level and more than 90% of purchase transactions were fraudulent,” Cleaves said. “We saw over 1 million infected devices.”

“Today, customer complaints are at 0.5%, calls to the call centre down by 75%, and fraud is attempted at a much lower rate,” he said.

In 2019, Upstream’s anti-fraud platform blocked 1.6 billion fraudulent transactions, preventing $2.1 billion in fraudulent charges.

This phenomenon is getting worse, too, with fraudulent transactions continuing to rise.

Upstream said that according to more recent data, the total number of mobile apps identified as malicious had doubled between Q1 2019 and Q1 2020, totalling 29,000.

The beginning of 2020 also saw a 55% spike in the number of fraudulent mobile transactions, which Cleaves said indicates that the majority of fraud cases are financially motivated.

Anti-fraud solutions and self-regulation

“As fraud becomes more sophisticated, operators must use more sophisticated tools to combat it,” Cleaves said.

“The pandemic has driven more people online, attracting bad actors who see it as yet another opportunity to steal and profit by tricking unsuspecting users.”

He praised the work being done by self-regulating bodies in South Africa, highlighting their impressive knowledge around fraud and the steps they were taking to combat it.

Cleaves described self-regulation as “fundamental”, explaining that local groups should establish the ground rules for participating in a market – including the need for anti-fraud technology – and that state regulators should have the power to step in if required.

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Mobile networks must stop relying on money from fraud – Expert