Identity verification services are taking over as vital tools to deter fraud in every industry and the telecom sector is no exception. While playing a significant role in providing video, voice, internet data, and text services, it is experiencing some major challenges. Synthetic identity fraud, account takeover, malicious calls, and fraudulent fund transfer requests are some of the noticeable threats.
The global telecommunication market worth is forecasted to experience a growth rate of 8.5% CAGR and will reach $2,866.61 billion by end of 2022. Since this industry is struggling with a variety of challenges, it needs to integrate robust IDV mechanisms. This blog entails types of fraud in telecom companies and ways ID verification solutions help counter them.
Fraud and Telecommunication Companies – A State of Continuous Struggle
The history of telecom dates back to when individuals were using smoke signals and drums to communicate. In 1790, there were some advancements when Europe invented the first semaphore system. However, until 1830, there were no further upgrades and fixed mechanisms for telecommunication. Over the years, this industry has experienced various shifts and has now taken the most refined form by integrating advanced technologies to facilitate global users.
Telecommunication companies indirectly or straightforwardly assist other sectors in terms of finance, national security, health, and much more. While making efforts to come up with more benefits, these firms are experiencing several criminal threats. In order to detect and deter fraud risks, telecom companies need to incorporate identity authentication services. These solutions will help them gain insights into customers’ profiles and ensure secure digital onboarding.
Fraud risks such as the creation of synthetic identities and fake profiles are seriously affecting mobile telecommunication. Criminals breach into this industry’s systems and exploit legitimate enterprises to carry out malicious activities. This can range from account takeover to worse cases including huge money thefts. Read on to know more about criminal threats within telecom companies.
Call Transfer Fraud
In order to steer clear of the ID verification process and exploit telecommunication operations, fraudsters are employing several strategies. The most common of these is fake call transfers. Criminals hack into VoIP PBX and make international calls free of cost. Fraudsters then transfer them to their own cell phones and deal with customers in accordance with their malicious intentions.
Telecommunication service providers hold inadequate identity theft protection mechanisms. This aids in fraudsters blackmailing or extorting individuals and by getting a call out of the network, there is no way to track it. However, integrating efficient identity verification services can overcome this issue by placing resection on unauthorized personnel.
Fraudsters use different techniques to create synthetic identities and impersonate authentic professionals. They can either pose as banking executives, third-party payment providers, or other officers. This helps them escape identity authentication and reach customers out of the box. Criminals dial fake calls and by convincing individuals to obtain their personal information for transferring money mostly.
Psychological manipulation techniques and identity theft further make illicitly reaping confidential details easier. Fraudsters further make the individual believe their account is compromised and ask them to install software that leads to malware. Inadequate identity verification checks largely facilitate vishing communication scams involving:
- Investment, loan, or financial benefits offers
- Compromised account or breached credit card
- Revenue collection scam
Account Takeover Fraud (ATO)
Fraudsters use malicious ways to obtain information related to customers’ bank accounts such as data breaches to take over them. They later make high-value transfers, fund terrorist activities, and flow their illicit funds through financial systems. With around 22% of adults experiencing ATO, implementing ID verification solutions has become a liability.
In order to deter fraud risks, telecommunication companies need to establish biometric identity verification systems for validating transactions more efficiently. ATO risks the reputation of this industry while increasing legal scrutiny risks. Therefore, to safeguard legit customers from account takeover, telecom companies require robust ID verification.
Contributions of Identity Verification Services in Fraud Prevention
The role of advanced IDV solutions is exceptionally crucial in countering criminal threats the telecom sector is experiencing. Integrating identity authentication helps companies validate users and their claim of being the rightful account holder. This will in return help telecom service providers stay put with Know Your Customer (KYC) and Anti Money Laundering (AML) directives. With robust real-time analysis checks, AI-powered identity theft protection tools uphold the worth of this industry while providing a positive and secure experience to customers.
In a Nutshell
Identity verification services entail numerous benefits for the telecommunication industry. From validating customers for preventing fake profile creation to deterring fraud risks by combining facial recognition, real-time presence, and liveness detection. Telecom companies are struggling to provide users with a secure communicating environment. In order to make this a reality, integrating identity verification solutions is their reliable bet.