Fraud is losing Pacific telcos money

Dionisia Tabureguci
Communications is blinking red hot on the to-do list of telecom companies in the Pacific. 

A recent indication from the Pacific telecom body PITA (Pacific Islands Telecommunications Association) was that the type of fraud commonly known as telephone number hijacking is expected to be taken up for discussion at the World Telecommunications Standardisation Assembly (WTSA) 2008, to be held in Johannesburg, South Africa, in October.

As such, small islands nations that often suffered the brunt of repercussions of telephone number hijacking may soon be in a position to do more about it than they were ever able to.

“Number hijacking is where calls to the Pacific islands are diverted without the knowledge of the calling party, the called party or the local operator. It is a growing problem for the Pacific islands with several of its countries affected,” PITA explained in its June newsletter.

“Number hijacking is fraudulent in nature. Not only does it give the Pacific islands a bad reputation, it forces many international operators to stop calls going out to these Pacific islands countries. Number hijacking also affects potential incomes for these countries and the values that would have resulted from these calls.

Several attempts by PITA to involve international regulators in the past to identify fraudulent operators have been futile due to commercial confidentialities within the international carriages. This approach to WTSA is an aim to help stop this illegal activity at the international level,” PITA said. 

Often the most obvious sign that a country is wrestling with number hijacking issues is when its country code number (IDD) has been blocked in another country, making it impossible for telephone calls originating from that country to come into the affected Pacific islands nation.

“What we’ve found is that when countries, particularly in Europe and United States, have been hijacking our calls, they have been hijacking it either for fraudulent purposes or sending the traffic to porn sites and the Pacific islands telecom operators had no idea this has happened,” Telecom Cook Islands CEO Stuart Davies told ISLANDS BUSINESS.

Davies is driving the Pacific push to get international attention on number hijacking, an issue he has been pursuing for years. 

In 2005, he wrote a paper on it and explained how it worked: “The first type of fraud is commonly known as “Modem Jacking” and has come about because of advances in technology.

“Modem Jacking” occurs when a secret programme is downloaded, usually from a porn site, on an unsuspecting user’s computer.

“This programme secretly dials an overseas destination whenever the computer is connected to the dial-up service and the call is held up for as long as the computer is being used. The user is usually unaware the call has been made until they get the telephone bill.  Naturally, the subscriber complains and refuses to pay their telephone bill.

“Because the overseas telephone numbers keep changing, it is very hard for the telephone operators to block these calls and so the easy way out is to block IDD calls to the whole country.”

The possibility now that this issue will reach WTSA and be discussed, it is a big step forward for PITA and the small Pacific islands countries affected by this fraud. 

“We want the regulators (in countries where the frauds are committed) to have more powers to be able to deal with those hijackers or perpetrators of those crimes and this is what we hope to achieve out of this submission. 

“At the moment, we have some cases pending. But it is extremely difficult to actually track them to get out information for prosecution, so this is why we are trying to strengthen the hands of the regulators,” Davies said.

But telephone hijacking is not the only kind of fraud that has affected telecom members of PITA. 

Another type that had them worried for a while is GSM fraud or fraud on the mobile telephone network. 

To tackle this, PITA recently chose US-headquartered vendor Syniverse Technologies Inc. after a competitive tender process, to provide its telecom members with GSM Near Real Time Roaming Data Exchange (NRTRDE) service.

“This fraud (GSM fraud) uses overseas GSM SIM cards and international roaming service,” said Davies in his paper.

“The methodology is that a SIM card is taken to a foreign company and a huge number of calls is generated. The GSM roaming system will trigger an alert, usually after about 24 hours, but by then, the fraudster has gone.

“The telephone company (the issuer of the SIM card) never gets paid the collection rate. Some companies (in the Pacific) have lost thousands of dollars and over US$100,000 in four hours in one reported case. Once again, the solution used was to bar IDD calls to that country.”

By having Syniverse as the NRTRDE partner, GSM service providers in the Pacific who are members of PITA can be alerted quickly as soon as unusual activities begin to take place on their networks. 

The telephone number hijacking issue is among the resolutions that will be taken up to WTSA 2008 by the Asia Pacific Telecommunity (APT), an organisation that PITA is affiliated to. The APT will represent the Asia Pacific region in WTSA.

“[Getting telephone hijacking on the list of resolutions] was the result of the Cook Islands submission to the APT preparatory meeting on WTSA-2008 held in Kobe, Japan, on 11-12 June 2008,” PITA said.