Irish start-up Xintec has good news for the world’s mobile operators ahead of Mobile World Congress: it has found a solution to the €10bn-a-year International Revenue Share Fraud (IRSF) problem that is taking a toll on mobile operators all over the world.
IRSF occurs when fraudsters use stolen SIMs or SIMs obtained using false identities to take advantage of international premium rate numbers and rack up millions of euros of cross-border calls that operators are obliged to pay termination fees for.
In 2015, the Communications Fraud Control Association (CFCA) commissioned a report that found an increase of 497pc in IRSF, which cost more than €10.7bn last year alone.
The problem is the rise in the number of fraudsters scamming networks via international premium rate numbers.
In 2009, 17 resellers were identified, and this has grown to 110 resellers that have been identified by Xintec.
‘IRSF fraud accounts for 26pc of the total $38bn a year in fraud that mobile operators have to contend with’
– ROB DURRAN, XINTEC
Xintec has created a new platform called Fraudstrike, which consists of a database of more than 200,000 numbers identified as being used by fraudsters and a set of detection techniques to enable early reaction.
“Roaming and revenue-share fraud is an enormous headache for mobile operators and very few mobile operators have been immune from it,” explained Rob Durran, general manager and co-founder of Xintec.
He explained that what typically happens is a reseller might buy a number range for premium rate numbers such as sex lines that charge €5 a minute. Meanwhile, using false documentation, other fraudsters will sign up for mobile SIMs using false documentation and rack up enormous cross-border termination fees.
The rules of the telecoms world stipulate that all operators are obliged to honour termination fees.
However, this results in a domino effect, with operators stuck with enormous fees that run into millions of euro per operator.
Prevention is better than cure
“We have found a way of tracking these fraudulent numbers through databases,” Durran added.
“When one of the fraudsters attempts to test a SIM on a network we can shut down that number and the fraudsters can’t connect through that number.”
Xintec, which will be exhibiting at the Enterprise Ireland stand at Mobile World Congress 2016, said the solution makes use of artificial intelligence and machine learning to learn the patterns of fraudsters.
He said the technology is currently used by Vodafone, Orange, KPN and by Denis O’Brien’s Digicel in the Caribbean.
Xintec raised €900,000 in a funding round in 2011 from Kernel Capital and Enterprise Ireland and, according to Durran, the company turned its first profit last year.
“IRSF accounts for 26pc of the total $38bn-a-year in fraud that mobile operators have to contend with.
“We have kept quiet about our technology until now but we have found a way to enable operators to stop the fraud before it happens,” Durran concluded.