nitzanPremium,VIP
join:2008-02-27
kudos:2 | reply to Stolgaz
Re: What is the biggest threat to small VoIP service providers? said by Stolgaz :said by PX Eliezer:Although the current crooks know all the tricks, we don't want to give any ideas to newbie crooks! Nah, simply knowing how they do it doesn't matter as newbies don't have stolen credit cards etc. and can't do it anyway. There's a ton of schemes, but here's a few:
1. Sign up with stolen credit card, make lots of calls and/or route wholesale traffic over it.
2. Sign up with legit credentials - but find an error in the provider's rates. We've recently lost $700 when an Indian company abused our service to make calls to a European mobile route at our landline rate. Unfortunately there's not much we can do about it aside from being more careful and babysit unusual traffic more closely. The scary part is they managed to rack up $700 worth of calls in only a few hours.
3. Some European premium numbers can be set to very high rates (like a few dollars a minute), then give kickbacks. A lot of scammers will basically try to find phone companies that will deliver calls to those premium numbers at a lower rate not knowing they will later be billed for those calls by their carrier at a much higher rate. NuFone lost something like $400k(!) on this scheme a few years ago.
The biggest problem by far though - is stolen credit cards.
how much are the crooks adding to a voip user's bill? More with smaller vosps? Less? For smaller providers who are CAREFUL - I'd say this isn't significant. For larger providers who aren't aggressive about fraud - this can easily amount to a double-digit percentage of their revenue.
If the owner of a vosp makes his users jump through certain hoops, will enough fraud against him be prevented so that he can charge less? Absolutely. We used to accept payments automatically without a waiting period. We had to babysit payments 24/7 because 40% of signups were fraud.
We changed our system to delay first-time payments until a human looks over them and verifies it's not fraud - and since then our successful fraud signups have dropped to near zero. The crooks don't want to be bothered waiting when they're using a "hot" card which can go bad at any moment - they'd rather move on to another provider who accepts payments immediately.
Do vosps suffer from fraud because they are afraid to put in such measures, thinking the users will desert them? Some do. We don't. I'd much rather keep our prices low and have users wait a few hours for their first payment to post (subsequent payments post immediately) than have to double our prices due to fraud.
Other providers post payments immediately, and use stuff like internal fraud and bad card databases, and/or commercial products that do the same. This is effective but not effective enough and they do still get a lot of fraud their way. Again in the end the crooks only care about whether they can get away with it or not. If 9 times out of 10 they fail they'll leave and never come back. If 1 time out of 3 they succeed - they'll come back over and over again. |
