Scam calls are a persistent problem for both communication service providers (CSPs) and their customers, presenting a multi-billion dollar fraud threat in 2021. That’s why Neural Technologies’ ScamBLOCK solution is designed to block scam calls, reducing the risk to CSPs and tackling the cost of scam phone calls before they impact customers.
The widespread advances and adoption of connected digital technologies have made it cheaper and easier than ever for scammers to attempt to defraud customers across the world using fraud techniques such as wangiri fraud and caller ID spoofing.
Call spoofing can be a particular problem for customers, as sophisticated fraudsters trick the recipient into believing that they are phoning from a trusted number or position of authority. This can lead to escalating costs, from being tricked into a single fraudulent payment right through to theft of personal and financial details that result in even more severe losses.
Automated technologies also now mean bad actors can make literally millions of spam calls a day, casting a wide net that’s certain to take in many vulnerable customers. The impact on customers successfully defrauded by these calls can be both financially and emotionally devastating.
A recent US study revealed customers received nearly 4 billion robocalls per month in 2020. That’s a significant and stark threat to customers. An earlier analysis of scam calls around the world previously reported on by Neural Technologies indicated that in 2018, an estimated 85 billion robocalls were made.
With the latest study indicating almost 50 billion robocalls were made in the US alone in 2020, it’s clear that robocalls are a significant and rapidly growing problem for CSPs and customers globally.
Inadequate protection for customers doesn’t just create financial and emotional hardship for those targeted. It also creates a cascade of downstream challenges for CSPs, including damage to reputation, significant resources dedicated to complaint and dispute management, and ultimately lost business through poor customer retention and reputational issues.
According to the Risk and Assurance Group (RAG) 2021 Digital Trust Survey of Revenue Assurance, Fraud Management and Cyber Security Professionals Working for Communication Service Providers, customers of CSPs experienced USD28.55 bil in annual losses due to fraud.
This loss demonstrates the remarkable threat of scam calls and fraudsters in the modern landscape. The report also makes clear that financial losses to CSPs fail to demonstrate the knock-on impact to customers.
“Relaxed attitudes towards operating risk leave customers hassled by fraudsters who use automation to make billions of unwanted calls and messages,” notes the RAG RAFMCS 2021 report.
SCAMBlock from Neural Technologies is designed to tackle fraudulent calls before they impact customers. It utilizes a multi-layered threat detection and prevention technique, leveraging our machine learning capabilities to meet evolving fraud threats. High-risk fraud characteristics are identified through link and correlation analysis which displays the characteristics of fraudulent behavior, which in turn feeds back into the machine learning solution as part of an iterative learning loop that keeps SCAMBlock updated to recognize the latest fraud threats.
A reported USD2.83bil is spent compensating victims of fraud according to RAG’s 2021 report, but at less than 10% of the total loss to customers, that represents just a small share of the true financial cost.
This compensation cost is another clear reason for CSPs to tackle fraud before it impacts users. Combining this figure with the cost to customers indicates a USD31.38bil leakage due to fraud which must be addressed. What’s perhaps more difficult to assess is what the total cost of fraud truly might be, because all evidence indicates that the cost of fraud is bigger than you think due to under-reporting and incomplete analysis.
RAG makes clear in its own report that the USD31.38bil total cost is an estimate based on the best possible data it can gather. It also notes concern that many fraud managers may not even know the trust cost of fraud to customers of their respective organizations.
Indicators such as number of customer complaints, identified fraud, and fraud cited as a reason for leaving a company are hailed as key indicators which may present a fuller picture of this threat. It’s clear that by the time these types of indicators are identified, it’s already too late for customers.
SCAMBlock offers a solution that prevents fraudulent phone calls from reaching customers, stopping bad actors at the source before the first fateful ring of a telephone. When it comes to protecting both CSPs and customers from the cost of fraud, that’s the only way to deliver the best possible outcome that reduces fraud risks, and keeps customers safe.