Traffic Pumping Fraud Hits VoIP

Fraud has been an issue for traditional telephone companies for years, but it was never a factor for VoIP until recently.  Call fraud in the VoIP industry is quickly becoming rampant and often goes unnoticed, but can have painful results. According to Revector, a U.K.-based fraud management company, some telcos are losing up to $150 million per year in fraudulent calls.

The scheme is simple and usually involves international calls to expensive destinations.  For example, the fraudster will set up a conference server in another country – typically a third world country, and often in Africa.  They will strike an agreement with the local phone company (often a state owned telephone company) so that they earn fees for any calls terminated to their conference server.

The fraudster will then gain access into a non-secure IP PBX or SIP phone and use a software hack to continuously generate multiple calls to their foreign conference server. The conference server answers the calls and maintains them in progress indefinitely, generating tens of thousands of dollars in international phone calls.

The unsuspecting fraud target is typically an enterprise, but the real victim is the SIP provider serving the enterprise customer.  The fraudster collects termination fees from the foreign local telephone company which in turn bills the international long distance vendor which then bills the SIP service provider serving the hacked enterprise customer.  Most enterprises never realize that they have been hacked, refuse to pay the charges and switch to a different service provider if the charges are not dropped.  The SIP service provider has little leverage over its international long distance vendor and is left to cover the bill. A single fraud event can cost a SIP service provider anywhere from $3-50 thousand dollars.

Because VoIP call fraud remains under the radar of most enterprises, VoIP providers must address the issue head on, before losing thousands or millions of dollars to a scammer.  TransNexus, already the leader in least cost routing solutions, is well positioned to join VoIP providers in the fight against fraud with this month’s release of its NexOSS Operations and Billing Support System.

The new NexOSS, in addition to its already industry-leading least cost routing features, effectively eliminates the problem of traffic pumping fraud for VoIP providers.  The solution is to include smart monitoring features that sense when there is an unusual spike in call traffic to a specific destination.  When a suspicious spike occurs, the NexOSS system simply and automatically puts a temporary block on the route, ensuring that fraud losses are kept to an absolute minimum without interrupting legitimate calls.

Click here to request a complimentary 90 day free trial of NexOSS 5.0