The mobile industry provides a perfect storm for fraudsters: high value devices; huge volumes of transactions; complexity in the delivery of services to end users that enables manipulation. Combined this provides fraudsters with the capability to embed themselves into a system quickly and effectively to make money.
Take the example of a gang that carried out a £2 million (€2.25 million) fraud against the mobile networks. Several members of the gang are now serving prison sentences for their parts in the scam. Yet had they been a little less greedy, they may well have escaped prosecution, says Andy Gent, CEO Revector.
The gang recruited students from Universities around the country to sign up for mobile phone contracts. In exchange the students were offered £50 (€56.28).The contracts came with expensive new handsets that the students then had to send on to the criminals. The gang unlocked the phones and sold them abroad, in some cases cancelling the contracts and returning the hand sets with what could only have been well created fake lookalikes of the originals. Selling the handsets abroad netted the gang a £2 million (€2.25 million) profit.
Only when the gang got lazy and decided not to cancel some of the contracts, did some of the students notice that they were being charged for mobile phone contracts. When they contacted the police, the game was up; but not before several of the students had negatively affected their own credit rating.
It is reasonable to ask why intelligent young men and women, the majority studying for University degrees, would think it was a promising idea to accept £50 (€56.28) in exchange for setting up a mobile account in their own name on behalf of someone else.
Perhaps naivety? Possibly greed, but whatever the reason, the real damage was done to the mobile networks in the UK that sent out legitimate handsets and got fakes back in return. Mobile handsets are a global commodity with high value and easy accessibility, which makes them ideal currency for fraudsters.
In the same week that these fraudsters were being prosecuted, fraud watchdog Financial Fraud Action UK (FFA UK) reported that the number of cases of mobile number spoofing had doubled in the past 12 months. Fraudsters are using easily accessible software to change the call identity of incoming calls – usually to a bank or other financial institution. People that answer these calls legitimately expect to be speaking to their bank and can disclose personal details that may compromise accounts or business operations.
Both stories demonstrate that fraudsters are getting bolder in how they operate. A year ago, fraudsters would have tried to intercept a single handset en route to its destination – possibly by amending the delivery address.Replicated hundreds of times this provides a lucrative operation for fraudsters.
The fact that the gang had moved on to effectively bribing students to take out contracts – scamming the networks on the way – demonstrates how brazen fraudsters can be. In a comparable way, the growth in number spoofing cases shows how a wider group of fraudsters are focussing on this area.
As always, those committing fraud will only choose a scam if it is successful. These two stories demonstrate again how committed fraudsters are to making money from mobile.
The author of this blog is Andy Gent, CEO Revector
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