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October 13, 2006

Mobile Operators Fighting Fraud

By TMCnet Special Guest
By Jay Seaton, Chief Marketing Officer, Airwide Solutions

As mobile devices increase in sophistication, the type and scale of data they carry makes them more valuable than many computers. Applications and services previously limited to PCs are also now available on mobile devices, offering subscribers experiences never before possible. However, as the mobile environment evolves, the same problems that have plagued PC users for many years (fraud, theft, viruses and spam) have also begun to threaten the integrity of the mobile industry.

The mobile phone is now no longer just a communications device. It is the apparatus for gaming, photography and downloading music, as well as an information and payment tool for services and content. But it is these additional services and the expanded capacities of today’s phones that make them an increasingly popular target for theft and fraud. Every year in the U.S., more than 37 million cell phones are lost, stolen, or damaged, according to California-based software company Advanced Wireless Solutions.

That said, subscribers and mobile operators should be worried about more than just mobile phone theft and fraud. Spammers see mobile phones as virgin territory for wreaking havoc by using techniques which exploit network specification loop holes and flaws in portable devices. While incidences are currently low, smarter phones and the adoption of standard Internet technologies leave users vulnerable to attack.

Similarly, unsolicited text messages are becoming a growing nuisance, and a lack of international legislation makes the problem hard to police. According to research from the International Telecommunication Union (ITU), more than 80 percent of phone users worldwide have received unsolicited text messages on their phone. In addition, there are concerns that the introduction of ‘text-to-buy’ services may compound the situation further by giving fraudsters another line of attack.

Text messages are not encrypted which leaves them potentially vulnerable and some subscribers are also concerned that the services could be beset by ‘phishing’ – a type of fraudulent activity whereby customers are sent text messages that look like they have come from a trusted source to persuade them to divulge their account details. Many regulatory bodies have responded by introducing strict new guidelines.

However, what is regulated in the letter of the law needs to be enforced by systems put in place by operators. Currently, many network operators voluntarily police potential fraudsters, but as messaging services continue to grow and become more complex, networks need a comprehensive range of features such as blacklisting, anti-spoofing and anti-flooding to prevent revenue leakage, preserve customer satisfaction and avoid identity theft.

Mobile operators also need to safeguard content received on the handset. Here, we can learn from the Internet. Without spam filtering software we would be bombarded daily with huge volumes of unsolicited e-mails. The nature of SMS delivery means that the ‘junk mail’ folder option usually employed for basic Internet spam filtering is not feasible for the mobile environment. Most mobile phones have only one inbox folder, so any spam filter must be absolutely certain that the message they are filtering out is definitely spam, and not intended for the individual concerned.

The responsibility therefore falls to the operator to interrogate the message to check its content. Using anti-spam and anti-spoof technology, operators can detect abnormal patterns in messaging traffic, confirm legitimate senders, filter content and block suspicious messages. Filtering content also helps the fight against the spread of viruses and trojans. Mobile operators can also use technology to share spam control with their subscribers by providing solutions to black-list certain phone numbers and block messages coming from these phones.

With appropriate content control filtering measures in place mobile operators can protect revenues and comfortably offer premium content without fear. Once subscribers feel assured they will not receive a barrage of unwanted content for downloading a single ringtone, they will feel more confident about downloading richer content in the future.

The ability to filter spam also allows operators to identify wider abuses such as mobile bullying. Socially responsible mobile operators can provide welcome support to anti-mobile-bullying campaigns by offering the tools to children, parents and schools to help control the content being received and spread.

In summary, we can all be victims of fraud in its various modes. Establishing a fraud prevention culture in all aspects of our day-to-day life has become a need, as well as a self-protection mechanism to guard against a growing list of risks. As an industry, there is much we can do to fight fraud. Many of us think we are doing all we can, but there are always ways to improve upon this to ensure confidence in the mobile industry. Due diligence and taking advantage of new technologies are major contributors to controlling fraud. While the pursuit of perfection may seem daunting - attention to fraud and security will pay dividends in preventing losses and maintaining strong public faith in the integrity of the mobile industry.


Jay Seaton is chief marketing officer for Airwide Solutions, a company specializing in next-generation mobile messaging infrastructure and applications.


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