Mobile Fraud may be damaging to operators

We’ve seen over the last 20 years that where ever there’s a new technology, there comes a risk of fraud. Although the telecoms industry is rife with scammers and dodgy dealers, mobile has been relatively fraud (and for that matter spam) free. There are a number of reasons for it, but at a practical level much of that is down to the way that the networks have sewn up their technology, and in particular a protocol called SS7. A warning from SS7 monitoring company, Evolved Intelligence suggest that fraud attempts are set to rise. Unfortunately fraudsers are finding their way around using it to both intercept phone calls, but to particularly send spam SMS.
Much of this is down to changes in the telecoms industry, with MVNOs (mobile virtual network operators) and hub operators having more access to the network. Along with it, VOIP and internetworking have given the fraudsters more tools with which to access the networks.
The result of this is more spam and more vishing (voice-based phishing) attacks or attempts at denial of service. From a mobile marketing stand-point this could become a real headache. With an increase in fraud will come an increase in consumer distrust of mobile marketing. They may, for example, be put off signing up for a brand campaign because they are wary due to previous spam attempts.

From online fraud to mobile fraud

A study of US phone users has predicted an increase in mobile fraud as a result of the increased smartphone market and mobile transactions. It mirrors the growth of online fraud which accompanied the growth of the internet.
The study was carried out by fraud detection technology company 41st Parameter … so I suppose you could argue that they would say it was increasing. However the study does raise some important points:

With the growth of the smartphone market, the online fraud prevention methods are less effective
The multiplicity of mobile operating systems makes fraud prevention more difficult
The growth of dedicated mobile sites, especially in the banking sector, has seen a similar growth in phishing sites. These are less obvious to users than the more familiar web sites, where people tend to be naturally suspicious of phishing

Although mobile presents new problems for fraud management, it also gives some specific solutions. Additional forms of verification are available on the mobile through the phone number and geo location.

A copy of the report can be ordered through the 41st Parameter website.