SIM Box Fraud has been recognized by the telecoms industry as the toughest fraud problem operators currently face. Operators spend around $51 million a year on bypass fraud management solutions, with operators frequently identifying and blocking large numbers of SIM Boxes, yet the problem seems to persist across the world.
What is SIM Box Fraud?
SIM box fraud involves the illegal setting up of international calls using a low-cost, prepaid, SIM card, which is part of a larger fraudulent business known as GSM termination.
It is common knowledge that international call tariffs are more expensive than calls from within the network. A SIM box fraud system enables fraudsters to earn money based on the difference between local and international tariffs.
SIM Box fraud occurs when fraudsters team up with international entities to route international calls through the internet using VoIP and terminate those calls through a local phone to make it seem as though the call made, was local.
Box operators are therefore able to bypass international rates to fraudulently undercut the prices charged by the Mobile Network Operators (MNO) and avoid surtax charged by the government.
What are the implications?
This fraudulent activity contributes substantially to a loss of revenue. SIM Box operators cause the decline of call and service quality, which prevents operators from meeting service level agreements for mobile hubbing traffic.
There have been no accurate figures reported for the full extent of SIM Box Fraud on taxes lost and the adverse effect on national infrastructure. With the damage of infrastructure over time, everyone is impacted. If one operator is susceptible to these attacks, other operators in the country are at risk.
Some may argue that prevention cannot be sought from the operators themselves but rather from separate entities who focus on foiling such activity. Operators simply do not have enough expertise on fraud management to effectively implement a lasting strategy. Because of this, fraudsters at present, are succeeding despite operator anti-fraud efforts, which highlights the greater need for more national and international regulatory controls.
What possible strategies guard against SIM Box Fraud?
What SIM Box fraudsters are doing is shifting their traffic to operators with the weakest anti-fraud detection system, which enables them to fly directly under the radar.
In such circumstances, the best form of prevention is unity. Operators sharing intelligence systems with each other, can improve and empower their efforts to build barriers against those who are easily infiltrating the system. Another beneficial initiative would be to reward and penalize operators to ensure policy compliance. Setting high standards and ensuring that operators maintain those standards would surely reduce the numbers of global fraudulent activity.