India - A Hot Spot for Telecom Fraud

India has one of the fastest growing telecommunications industry in the world. As such, it has become a ripe target for fraudsters, especially with the emergence of new technologies such as 3G and Voice over IP (VoIP).

Telecom fraud is estimated to cost the industry $40 billion (which is roughly 2% of the global telecom revenues), as stated by KPMG's recent biennial India fraud survey.

Fraud is perpetrated due to technological advances along with weak internal controls in India. As quoted by ICTPost, " A telco customer suffers when a fraudster, taking advantage of the poor identity checks at the telco, is able to use the telco network for voice/data connectivity and the bill has to be footed by the customer."

The recent KPMG study states that in order to combat telecom fraud, strategies need to be deployed to bolster Fraud Control Units in terms of monitoring transactions as well as outsourcing to "sector-focused forensic experts" to actively identify fraud suspects and their activities.

These actions will enable telecom companies to prevent fraud in the future and become less of a target. Also, it would bolster fraud deterrence if stiffer fines and penalties were enacted similar to the U.S. where penalties can start at $11,000 per call and increase substantially from there.

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