Your Business is Under Attack: How Scammers Steal from Enterprises

Part 1: What is Wangiri?

Strange foreign numbers have been tearing up your phone all day. They come from a country you have never been to. Each time the numbers change slightly, making it impossible to block them. They only call for a few seconds before hanging up.

If you feel tempted to call them back, you’re falling right into the scammer's trap – and this trap could cost you a lot. This is Wangiri fraud. Now let’s look at the numbers.

According to the recent estimates conducted by CFCA, the global telecom industry suffered a total of $39.8 billion of its revenue due to fraud last year. Of this sum, $2.23 billion were lost to Wangiri fraud. Besides, even the most sophisticated fraud management systems (or FMS) that use AI algorithms cannot accurately pinpoint the fraud source and stop the scheme.

So, is there a way to avoid this unnecessary expense? How can you save your money and your business from fraudsters?

Luckily, new technology is rapidly spreading. But first, we need to decipher how exactly Wangiri works – to know what measures to enforce.

Part 2: How Wangiri works and damages

This particular fraud scheme has emerged in Japan where it got its name – Wangiri means ‘one ring and drop’ and translates to the very short duration of the incoming call. Scammers often spam the end-users with these short calls. Sometimes the scheme involves an initial SMS with a hook to interest a person, but ultimately these actions have one goal – to make people call back.

In contrast to other fraud strategies that force you to prolong the call to rack up the charges (i.e. call stretching), the losses may seem negligible at first sight. But Wangiri fraud targets both regular users and enterprises (take a mental note: we’ll get back to it later), disorders customer flow and overloads phone call routes, all while stealing billions of dollars.

The main reason this fraud type has gained popularity among fraudsters in recent years is its low cost for call initiators. Since most of these one-ring calls are dropped short moments after the end-user answers, the scammers don’t need to invest too much, and they can dial a virtually unlimited number of call attacks to any destination. They lure their potential victims in by leaving a ‘missed call’ and then trick them into dialing an international or otherwise high-rate number by rerouting the call, thus generating profit.

Consequently, even one percent of Wangiri calls can amount to hundreds, or even thousands, callbacks to numbers leaving a ‘missed call’ just in one day. All of this sums up to ginormous losses for the victims and awfully huge profits for the wicked.

Part 3: No shortcuts in evolution

But we’ve only reached the tip of the iceberg. The true problem of this fraud is that it’s constantly evolving. Similar to a certain well-known virus that is producing dozens of new deadly strains, a new variant of Wangiri fraud has been on the rise – simply called Wangiri 2.0. It’s maybe not as exciting as Pikachu transforming into Raichu, but the damages of Wangiri 2.0 are not to be underestimated.

The new variant’s main distinction from its more traditional ‘parent’ is the target. Normally, only the telecommunication businesses and their customers suffered from the one-ring call scheme. But recently the fraudsters have switched their area of interest to whole brands as opposed to individuals. Wangiri 2.0 scammers take advantage of the ‘service above self’ philosophy of enterprises and their commitment to customer support and overflow their call centers with fake customer numbers.

The scammers train bots to submit countless high-rate telephone numbers to internet-based business contact forms. The enterprises are unknowingly dialing premium numbers believing they are growing their customer base or getting back to a worried client. Many unsuspecting organizations might blindly mistake the fraudulent boost in traffic as a sign of their business growth. But as a matter of fact, they are being hoodwinked into blowing their funds into the abyss. Hardly a positive dynamic.

But the damages of Wangiri fraud don’t stop at financial losses. In the enterprises case, they can also hurt the business’s reputation and disrupt performance rates. People who fall victim to Wangiri dispute their fraudulently enlarged phone bills with their mobile carriers putting the latter into a tough position. Since it’s almost impossible to track down the fraud initiators, the carriers who want to resolve the conflict with a customer are only left to choose between two evils – rebate the bill or risk customer churn, which is essentially a lose-lose situation. To find out more about our approach to detecting new fraud types please contact us directly at contact@abhandshake.com.

Part 4: Why do traditional FMS struggle to point out Wangiri?

Now that you see how damaging the impact of Wangiri fraud is, let’s discuss how we can stop it – or, rather, can’t stop it. You see, one more difficulty with this particular scheme is the lack of 100% accurate solutions against it. It remains one of the most problematic fraud types for traditional technology to deal with. Let’s look at past experiences.

Fighting the original version of Wangiri, telecom operators introduced Blacklists. In order to stop one-ring calls, they attempted to keep up with the fraudulent number ranges utilized by the schemers and block them according to the IPRN, or International premium rate numbers, that they’ve already encountered. However, since changing numbers is no challenge for a fraudster, they tried in vain and all newly collected data was almost immediately out-of-date.

The world needed a more sophisticated solution. Modern FMS based on AI technologies looked promising – experts planned to feed them Wangiri patterns to teach them how and what to look for and block. And here comes the next obstacle on the path to the fraud-free world: what data do you give to the AI? And how would you collect it?

The root of the question lies in the fundamental nature of telecommunication service providers. Telcos don’t do networking, so to speak, when it comes to fighting fraud. It’s a hugely populated industry, after all. Every business is left to approach their fraud situations on their own, unsupported by their fellow partners who might have already been struggling with similar issues for quite a while. Moreover, the necessity of a fraud management system being used against any type of fraud is only brought up when some damage has already been done. It’s always about how to stop, not how to prevent altogether.

These are the weakest points of telecommunications – no organized community and a reactive approach to protection – that criminals take advantage of. Let’s take a closer look at them.

Disjointed process

It takes a lot of steps to transmit one call. Wangiri scams use multiple operators to deliver callbacks, for example. Voice calls can originate on one cellular network and terminate on another fixed-line network, requiring a different provider.

The more complicated the session, the more likely it is for a scam to be successful. A cell phone call may begin outside the United States, transit the globe via a long-distance network, or transit several other networks before reaching another mobile network within the United States. One single call can have lots of joints in its structure which can lead to blind spots and complications when fraud enters the scene.

Because of its fragmented nature, the entire call chain may serve as an access point for fraudsters. Due to the vulnerabilities we mentioned, they can hijack the call chain at numerous points along the way. However, we can also use this information to prevent telecom fraud more effectively, but for now, just keep it in mind for when we get there.

Faults of no proaction

Next, we need to address the environment in which telecom providers use traditional FMSs.

The universally accepted take on anti-fraud actions, including strategies used against callback scams like Wangiri, is centered around the immediate damages and dealt with by operators alone. Lack of cooperation and limited volumes of data for AI-based FMS to learn from cause glaring loopholes in network security. Only a portion of attacks get stopped, while plenty go unnoticed.

Another liability is that there’s no 100% guarantee for carriers to detect suspicious calls. Often, operators are faced with a dilemma - whether to let an outgoing international call through (and earn a profit from it) or not, with customer experience on the line.

Additionally, the traditional anti-fraud approach only focuses on protection and ways to mitigate the damages. The main concern is to guard one’s network from the attacks with a defensive wall – sure, it’s more modern than ramparts of the past, but the approach is still outdated. Despite the operators’ efforts, the fraudsters continue to steal billions of dollars each year from end-users.

Part 4: Evil is Evil. Choose none.

In the present communications setting, a conventional FMS is having trouble fighting Wangiri. Businesses work on their telecom misfortunes in confinement from different organizations, with basically no correspondence between each other. Thus, traditional FMSs are missing out on the potential training on problems their partners might have already faced.

The more revolutionary way of thinking would be fraud prevention instead. Wouldn’t it be easier to avoid the damages in the first place? Wangiri fraud cannot be stopped by individuals. To prevent it unmistakenly, we need a trusted community, a real-time communication channel, and the ability to monitor what's happening at other points along the call chain.

Although Wangiri scammers use sophisticated tactics to avoid detection, they all use the same call details to make calls across any network and at any time. The following call details allow us to detect and stop all Wangiri scams 100% reliably with absolutely no false negatives.

Industry collaboration can be achieved via operator communication that would let them cross-validate call details in real-time, just as the call is initiated. This solution enables operators to detect even the slightest manipulation at any point of the call chain with 100% accuracy and prevent the Wangiri scam from ever going through. This is the AB Handshake solution in a nutshell. The revolutionary technology behind the service provides a simple, yet highly efficient end product, available for any operator on any continent to try out. Get in touch with us to get 100% fraud protection at contact@abhandshake.com.

About AB Handshake

AB Handshake Corporation offers a game-changing solution that prevents fraud on inbound and outbound voice traffic. Their call validation service enables global cooperation between all parties in the telecom industry.