Telecom fraud is a constant challenge that costs providers and customers billions of dollars each year. With rapid digital transformation and expansion in telecom services, fraudsters continuously exploit vulnerabilities to deceive customers. With digitalization, the way people use their devices and interact with service providers has also transformed, but not all customers are comfortable with these interfaces. Fraudsters exploit these gaps as well to gain access to customers’ devices and accounts.
One of the most powerful tools to prevent telecom fraud is customer awareness. Educating customers about potential threats and best practices can significantly reduce fraud risks and contribute to a more secure telecom ecosystem.
Why Customer Awareness Matters in Telecom Fraud Prevention
Customer awareness is the first line of defence in detecting and preventing telecom fraud. When customers understand common fraud tactics and modus operandi, they can better recognize suspicious activity and avoid falling victim. This awareness also reduces operational burdens for telecom providers, as informed customers are more proactive in reporting potential scams and encounter fewer fraud-related issues.
According to the Communications Fraud Control Association (CFCA) Global Fraud Loss Survey 2023, the global telecom industry loses approximately $38.95 billion to fraud, with most fraud types directly targeting consumers. This staggering figure, representing about 2.5% of the industry's revenue, underscores the need for proactive fraud prevention—of which enhanced customer awareness is a vital component.
How Telecom Operators Take the Blame for Customer Lack of Awareness
Telecom operators often bear the blame when customers fall victim to fraud, even if incidents result from customer unfamiliarity with processes and protocols. Providers are widely seen as responsible for delivering secure, reliable services, so any breach—whether linked to the provider or not—often reflects poorly on them. This perception exists because customers assume operators have implemented comprehensive measures to protect accounts and devices. When fraud occurs, particularly with schemes like SIM swaps or phishing, customers frequently attribute the failure to the telecom operator rather than their own lack of awareness.
Additionally, as telecom services become central to essential activities like banking, financial sectors and personal communication, where operators provide the data infrastructure and facilitate OTPs and authentication codes, customers expect operators to be the gatekeepers of secure communication. Many, however, remain unaware of specific risks, such as the importance of two-factor authentication or how to recognize phishing attempts. Even if operators provide security guidance, it may go unheeded or misunderstood, yet the responsibility is often perceived to rest with the telecom operator.
With the rise in adoption of OTT services, many customers now access a range of services via their telecom data networks without always distinguishing between the service provider and the OTT platform. Fraudsters exploit this confusion by impersonating popular OTT brands, sending phishing messages, or requesting account details under the guise of offering service upgrades or content access. Additionally, since most of these OTT providers often use the customer’s mobile phone numbers as their user login IDs to register their accounts and also have 2-step verification requirements via OTPs sent directly to the mobile number, customers may mistakenly attribute responsibility to their telecom provider, assuming it’s a network-related security issue. This misunderstanding amplifies the blame on telecom operators while highlighting the need for clear customer education around recognizing OTT-specific scams.
Customer Awareness in Specific Types of Telecom Fraud
Social engineering—a technique that manipulates individuals into revealing sensitive information or performing actions that compromise security—enables many fraud types. Here’s how customer awareness can help mitigate risks in various telecom fraud schemes:
1. SIM Swap Fraud: In SIM swap fraud, fraudsters impersonate customers to have their phone numbers transferred to new SIM cards. Social engineering methods are used to establish credibility and pass security checks.
Customer awareness around SIM swap risks—including caution with unsolicited inquiries—helps customers recognize warning signs and alert providers before unauthorized transfers occur.
2. Phishing and Vishing Scams: Phishing (via email or SMS) and vishing (voice phishing) scams use social engineering to trick customers into sharing personal information.
Fraudsters use manipulative tactics, to create urgency or impersonate authority, to obtain data. Educating customers on recognizing these cues—like requests for passwords—can make them more vigilant and less likely to be deceived.
3. Call Forwarding and Divert Fraud: Call forwarding fraud involves tricking customers into activating call forwarding, allowing fraudsters to reroute calls. Most commonly, scammers pose as customer service executives of operators instructing customers to enable call forwarding “for troubleshooting.”
Raising awareness about authorized operator to customer contact channels, and how to identify the genuineness of anyone requesting technical actions can protect customers from these schemes.
4. Premium Rate and Wangiri Fraud: Wangiri fraud, or “one-ring-and-drop” scams, exploits customers’ curiosity about missed calls. When customers call back, they end up incurring charges on premium-rate lines.
By educating customers to avoid returning unfamiliar or international calls, telecom providers can help prevent this type of fraud.
5. Subscription Fraud: Subscription fraud involves fraudsters using stolen or fake identities to access services, incurring costs for customers or providers. Social engineering methods may be used to obtain sensitive information from gullible customers.
Encouraging customers to safeguard personal data and verify requests for details helps reduce fraud success.
6. Account Takeover: Account takeover fraud often relies on social engineering to gain account credentials. Fraudsters send phishing emails or make malicious support calls to extract sensitive information.
Educating customers on the importance of having strong passwords and being vigilant against unusual activity can help mitigate these risks.
Linking customer awareness efforts to these specific fraud types can offer targeted guidance to help customers recognize social engineering tactics commonly used in each scheme. This empowers customers and supports in creating a more secure telecom environment, making prevention of fraud a collaborative responsibility.
In addition to customer awareness, it is important to note that the operators too have the responsibility of implementing the right processes and controls to combat most of the above-mentioned frauds.
Strategies for Raising Customer Awareness
Most telecom providers employ a variety of strategies to enhance customer awareness. Here are some effective approaches to educating customers and reducing fraud risks:
1. Educational Campaigns: Targeted campaigns can educate customers about specific fraud types using infographics, newsletters, and website resources. Regular updates on emerging fraud tactics help keep customers informed.
2. SMS Alerts and In-App Notifications: Providers can send alerts and notifications to inform customers of recent scams, encourage secure practices, and prompt reporting of suspicious activity.
3. Interactive Tools and Resources: Online fraud prevention courses, quizzes, and interactive resources on provider websites help customers learn best practices in an engaging way.
4. Partnerships with Financial Institutions: Many telecom frauds have financial implications. Cross-channel campaigns with banks and financial institutions can increase awareness about common scams.
5. Enhanced Authentication Methods: Educating customers on multi-factor authentication, strong passwords, and biometric logins can secure accounts and devices, reducing unauthorized access.
Conclusion
Customer awareness is undoubtedly a critical component in combating telecom frauds. When informed, customers are not only able to better detect, protect themselves, but also become collaborative partners by reporting suspicious activity, helping the operators in protecting other customers wherever possible.
Though customer awareness serves as the first line of defence in fraud prevention, it is equally essential for operators to implement robust processes and controls. These measures not only minimize the impact of fraud on both the telco and customers, but also serve as key differentiators in terms of brand trust and reputation.
Given the complexity and impact of fraud, it's clear that while the industry should continue investing in awareness campaigns to build a stronger, more resilient ecosystem, the responsibility for awareness must be shared by both customers and telcos.