June 12, 2024

The Impact of Telecom Fraud on Businesses and Consumers

The Impact of Telecom Fraud on Businesses and Consumers

Despite enhanced efforts and enforcement, telecom fraud is on the rise. Fraud has several negative consequences. Primarily, it can alter the information that appears on caller ID screens, making you susceptible to strategies like number spoofing.

Fraud has also eroded consumer trust, resulting in fewer people answering their phones when they receive calls from unknown or suspicious numbers. The understandable lack of trust makes it harder for legitimate businesses to connect with their customers. Clearly, telecom fraud has negatively impacted businesses and consumers.

Telecom Fraud Is on the Rise

Data shows that telecom fraud is on the rise. Other than occasional quarterly dips, telecom fraud has increased steadily for the last few years.

One report shows that telecom fraud losses have risen from about $180 million in the first quarter of 2021 to about $250 million in the first quarter of 2024.

Impact of Telecom Fraud on Businesses

The telecom industry takes this situation seriously. It has rolled out new tools, technologies, and regulations to combat robocalls and telecom fraud. These efforts haven’t solved the problem, but they have made steps in the right direction. To make matters even worse, criminals leaked the private data of 74 million customers to the dark web by the third quarter of that year.

Industry Solutions for Preventing Telecom Fraud

The telecom industry has expanded its tools, technologies, and regulations to combat robocalls and telecom fraud. While there’s still a lot of work to do, these steps have moved the industry in the right direction.

Some of the most useful solutions implemented to combat telecom fraud include the following:

STIR/SHAKEN

STIR/SHAKEN is a collection of authentication and verification protocols that pass calls through several interconnected networks to identify a call’s source and credibility. Although some fraudsters have found loopholes to evade accurate identification, STIR/SHAKEN ideally ensures that your caller ID screen only displays accurate information.

Call Labels

Call labels help consumers avoid incoming calls from suspicious numbers. You’ve probably seen labels like “spam likely” or “suspected scam” on your caller ID screen. These labels have two major sources.

Third-party apps empower consumers to report numbers they distrust. For example, you might mark a call as spam when someone pressures you into giving them information or buying a product.

Carriers use analytics engines that review massive amounts of caller traffic to spot aberrations. For instance, the carrier might notice that a phone number makes more calls than humanly possible. When that happens, the number is likely using a robodialer in unethical ways that suggest someone is committing a scam.

RealNumber DNO

RealNumber DNO (do-not-originate) is a database of inbound-only numbers. Many companies have specific numbers for placing outbound calls and receiving inbound calls. They will never use the inbound numbers to call consumers.

The RealNumber DNO database helps prevent caller ID spoofing, also called number spoofing. If a number in its database places an outbound call, service providers using the do-not-originate database can interrupt the call before it ever reaches the intended target.

SIP Analytics

SIP analytics can stop problematic calls before they’re made. When SIP analytics detects fraud or robocalling, it generates a trigger that causes the telecom system to deny the call.

Attestation Ratings

Attestation ratings use aspects of STIR/SHAKEN to attest to the authenticity of a call’s origin and number ownership. The attestation process assigns one of three ratings to calls:

  • Full Attestation (A status)
  • Partial Attestation (B status)
  • Gateway Attestation (C status)

The origins and number ownership of A-status calls have been completely authenticated, so telecom service providers and consumers can trust their origins. The origins of B-status calls have been confirmed, but the status can’t ensure who owns the number.

C-status calls typically come from overseas. It’s impossible to authenticate their origins or whether the dialers own the numbers.

Rich Call Data

Rich call data (RCD) adds to the information typically displayed on caller ID screens. For example, calls coming from your business’s outbound numbers might show:

  • The name of your business
  • Your business’s logo
  • The department reaching out to the consumer
  • The reason for placing the call

This makes consumers feel more comfortable about answering incoming calls and helps improve your brand identity.

How Businesses Can Protect Their Caller ID

While these tools help protect businesses and consumers, they aren’t foolproof. Businesses, therefore, need to do more to protect their number reputations.

Register Your Phone Number

Register your outbound numbers with major carriers so they know calls come from a legitimate source. Registering your numbers also helps ensure caller ID screens display accurate information about your business, which should improve answer rates.

Adopt Ethical Dialing

Adopting ethical dialing habits will protect your numbers from negative call labels and blocks while improving answer rates. Some of the most important ethical dialing steps you can adopt include:

  • Complying with STIR/SHAKEN guidelines
  • Avoiding numbers listed on the federal DNC (do-not-call) list, as well as your internal DNC list
  • Following TCPA rules, such as only calling between 8 am and 9 pm (local time for the recipient) and training agents to announce their names and your business name at the beginning of each call
  • Following any regulations specific to your industry
  • Utilizing the Reassigned Numbers Database (RND)

Monitor Your Phone Numbers

You need to know whether consumers see labels like “scam likely” or “spam risk” when you call them from your outbound numbers.

Monitoring your numbers can also help you identify other problems, such as caller ID spoofing, poor agent training, and dialer configuration issues.

Caller ID Auditing

Caller ID auditing shows you precisely what your contacts see when you call them. Caller ID Reputation’s Device Cloud service accomplishes this by sending you screenshots from popular smartphones connected to popular carriers.

If you ever see inaccurate or otherwise concerning information, you will know which carrier to contact about making a correction.

Call Remediation and Redress

Call remediation and redress corrects inaccuracies that make it harder for you to connect with leads and customers. Number Redress Remediation simplifies the process.

With Number Remediation, you don’t have to contact service providers and third-party apps to update your information. Instead, you rely on an expert at Caller ID Reputation to provide the managed service for you.

Want to learn more about the benefits of avoiding the negative effects of telecom fraud? Contact Caller ID Reputation to speak with one of our representatives.