Can Least Cost Routing exist without telecom fraud?

VoIP has opened a multitude of possibilities for companies, both in service and cost. But it has also enticed predatory activity that results in VoIP fraud.

Least cost routing allows telecommunications to find the best priced route for calls. That lower cost, however, needs to come with increased security to ensure that fraud does not occur.

In many cases, least cost routing devices are used to distinguish between hundreds of carriers for the best solution available at any given time of day. Least cost routing software loads the prices and schedules and watches over call commitment and capacity. The systems can be expensive, but over time, pay for themselves. That is unless the system is vulnerable to hackers who will defraud the company, sometimes out of millions of dollars in calls.

The perpetrators committing fraud are using VoIP devices to commit their crimes. Nearly half of all fraudulent calls are made using the VoIP phones. Telecommunications companies are feeling the burden of these fraudulent calls, and companies that use and sell VoIP services are also in the line of fire. Most of the time, these companies don’t realize they’ve been compromised until it’s too late.

To make matters worse, once these companies are compromised, the law requires that they pay the bill, even though it wasn’t anyone within their organization making the calls.

While much of the telecom fraud is originating in Africa, the problem is global. It is especially a problem in those countries where regulations don’t deter illegal activity. Somalia, Sierra Leone, Zimbabwe, Latvia and Cuba tend to be the hot spots for VoIP abuse and fraud.

While it’s not easy to put a number on the amount of money being lost to VoIP fraud, some reports put it at around $40 billion, and the problem is growing by as much as 30 percent per year.

There are fraud detection solutions available. Along with least cost routing features, companies offer tools that help eliminate fraud, which includes monitoring capabilities that sense when there are anomalies occurring with the call traffic. Whenever these oddities occur, the system puts a block on the route while allowing little disruption of the genuine calls.

TransNexus offers software that can deliver optimal least cost routing solutions, as well as fraud detection, number portability, QoS controls and profitability analysis. We specialize in applications for managing wholesale VoIP networks, and is an active contributor to open source software solutions and can be used with any VoIP system based on SIP.

As a whole, the VoIP industry is enabling low cost communications for companies seeking to optimize their communications portals and network connectivity. Least cost routing ensures those lower costs are protected. The critical element for any carrier offering VoIP is to ensure solid fraud protection at all times, to protect revenue streams and quality of experience (QoE) for all customers.