Why you should monitor telephone costs

Citation

(2002), "Why you should monitor telephone costs", Work Study, Vol. 51 No. 3. https://doi.org/10.1108/ws.2002.07951caf.001

Why you should monitor telephone costs

Why you should monitor telephone costs

Telephony fraud worldwide is estimated to be running at $50 billion a year, according to the Forum for Irregular International Network Access (FIINA).

While the figure may be overstated, it does reveal that fraud is a significant problem. Fraudsters attack the networks and facilities of both telco companies and corporate organisations and their "reach" is much wider than many like to admit. Large corporations may have the resources to identify and deal with fraud (and potential fraud) – it is small-to-medium-sized enterprises that are at the greatest risk.

The situation is exacerbated because many – even large – organisations have outsourced their telephone service. This leaves them without the expertise to detect even the most common types of fraud. A PABX is, in effect, a network (connected to the global telephone network) and is vulnerable to external attack. Additionally, since individual telephone transactions are of low value, many firms fail to adequately monitor and control telephone costs. Useful data is simply not collected or processed; this leaves the door wide open for "dial-through" fraud – one of the UK's fastest growing crimes. Of course, the "cleverer" fraudsters simply put a small overhead on overall costs – they prefer to keep several "lines" open to them over longer periods.

Many famous (and surprising) organisations have been hit by such fraud. There was, several years ago, an embarrassing case in which Scotland Yard phone numbers and passwords were posted on the Internet. (Mainly) US-based callers made £1 million worth of calls before they were discovered.

Most firms are reluctant to admit that they have been defrauded. There is a belief that even to admit to taking security steps to avoid fraud is an admission of vulnerability – and may result in a loss of confidence from backers or clients.

Possibly as much as two-thirds of the fraud is carried out on telcos. Because of the huge losses they suffer, telcos generally try to insulate themselves from any client losses. Some commentators believe that this approach is counter-productive in the longer term, thinking it better that the telcos work with their clients to minimise collective losses. This might lessen companies' reluctance to be more honest about telephone fraud, and bringing it more into the open would almost certainly make it easier to tackle.