Head of Secure-D Geoffrey Cleaves Warns Mobile Networks Must Stop Relying on Money From Fraud

We have reported several times concerning this issue of many consumers having reported that their airtime and mobile data are disappearing, and that it is not in line with what they use. Vodacom is currently facing a spate of subscriber complaints regarding airtime disappearing from accounts due to rogue Wireless Application Service Provider (WASP) subscriptions. Of great concern were reports from two Vodacom customers who found that Vodacom’s own WASP had subscribed them to content services without their consent.

RELATED READING: VODACOM PREPAID AND CONTRACT SUBSCRIBERS HIT BY AIRTIME THEFT

MTN faced similar challenges with airtime theft and fraudulent subscriptions last year, though never with its own WASP, and rolled out several measures to stamp out such fraud. Much like debit order fraud, the fight against rogue WASPs is a game of cat-and-mouse where the fraudsters are always trying to find a way to exploit loopholes in the systems of mobile operators.

RELATED READING: HOW MTN STOPS ROGUE WASPS FROM STEALING CUSTOMERS’ AIRTIME

Now the Head of Secure-D Geoffrey Cleaves has warned mobile networks against passively relying on fraud-based or “toxic” revenue. Secure-D is Upstream’s proprietary mobile anti-fraud platform, combating mobile ad fraud at the operator level.

Speaking at the Global Carrier Billing Summit 2020, Cleaves warned against mobile network operators’ (MNOs) passive reliance on “toxic” fraud-based revenue streams, arguing they do far more harm than good in the long-term.

RELATED READING: MTN PROMISES TO FIX ‘DISAPPEARING AIRTIME’ ISSUE WITHIN NEXT 30 DAYS

He described anti-fraud technology as being “essential” and “necessary” as MNOs continue to devise their digital transformation strategies.

“When we first started our implementation with a major South African operator, customer complaints were at an unacceptable level and more than 90% of purchase transactions were fraudulent,” Cleaves said. “We saw over 1 million infected devices.”

“Today, customer complaints are at 0.5%, calls to the call centre down by 75%, and fraud is attempted at a much lower rate,” he said.

In 2019, Upstream’s anti-fraud platform blocked 1.6 billion fraudulent transactions, preventing $2.1 billion in fraudulent charges. This phenomenon is getting worse, too, with fraudulent transactions continuing to rise.

Upstream said that according to more recent data, the total number of mobile apps identified as malicious had doubled between Q1 2019 and Q1 2020, totalling 29,000.

The beginning of 2020 also saw a 55% spike in the number of fraudulent mobile transactions, which Cleaves said indicates that the majority of fraud cases are financially motivated.

Anti-fraud solutions and self-regulation

“As fraud becomes more sophisticated, operators must use more sophisticated tools to combat it,” Cleaves said. “The pandemic has driven more people online, attracting bad actors who see it as yet another opportunity to steal and profit by tricking unsuspecting users.”

He praised the work being done by self-regulating bodies in South Africa, highlighting their impressive knowledge around fraud and the steps they were taking to combat it.

Cleaves described self-regulation as “fundamental”, explaining that local groups should establish the ground rules for participating in a market – including the need for anti-fraud technology – and that state regulators should have the power to step in if required.