How Regulators can Lead the Fight Against International Bypass Fraud

No one can give you an accurate worldwide figure on the taxes lost and national infrastructure damaged due to international bypass fraud via illegal SIM Box activity.

In fact, no international or watchdog organization — ITU, United Nations, etc. — has released authoritative figures on national losses from bypass.

Yet, to nations infected by International Bypass, the symptoms are very obvious: tax revenues from international voice traffic are in decline; the quality of voice service is getting worse; and licensed telecom operator profits are being hurt.

So, as a regulator, policy maker or law enforcement expert in an infected country, what can you do to improve the situation?  What steps can and should you take — at the national government level — to better protect your country’s tax revenue, quality of communications, and national infrastructure?

Well, answering these questions is the purpose of a new TRI white paper entitled: How Regulators can Lead the Fight Against International Bypass Fraud: Six Proactive Steps Regulators Can Take to Better Manage the Problem and Protect Their Nations from Huge Revenue Losses & Infrastructure Damage.

The paper is sponsored by LATRO Services, a leading fraud management vendor who has delivered solutions to several regulators in support of solve SIM box bypass problems.

The white paper covers one-by-one the following topics to:

• Show the damage to financial and national infrastructure which is caused by bypass fraud;
• Explain the divide and conquer strategies fraudsters use to maximize the money they steal;
• Discuss why regulators should lead the national bypass FM effort rather than defer the problem to the licensed telecom operators; and,
• Recommend specific steps regulators should take to better manage and coordinate the national bypass fraud problem.

Six key strategies are recommended and discussed in the paper:

1. Write Laws that Make Bypass Fraud a Costly Crime to Commit
2. Gain National Visibility over SIM Box Fraud Activity
3. Coordinate the Use of Vendor SIM Box FM Systems & Services
4. Audit the FM Performance of Mobile Operators
5. Reward & Penalize Operators to Ensure Policy Compliance
6. Bust Up SIM Box Operations & Make Arrests

The paper concludes with a regulator case study from the Middle East.  Jordan’s Telecommunications Regulatory Commission (TRC) conducted a full-scale government-led program that significantly reduced the amount of SIM Box fraud in the country.

In TRC’s successful SIM Box mitigation program, critical data was combined from the Jordanian operators’ fraud management systems in addition to TRC’s own test and analysis, allowing TRC to successfully locate and arrest SIM Box operations and prevent further financial loss to the operators and the national government.  The paper discusses the five key steps TRC took to achieve its success.

In all, we think this paper will be essential reading for regulators in countries affected by SIM Box bypass problem.  The paper can be downloaded for free by clicking on the link or image above.

Dan Baker
Research Director, TRI