Identity Theft Tops List of Telecom Fraud, New TRMA Industry Study Shows

Wednesday 31 March 2004 20:50 CET | News

A new survey of the countrys leading telecommunications carriers reveals that "identity theft" is the leading type of fraud afflicting the industry. In response, major carriers are joining to fight the problem in an industry-wide campaign. The Telecommunications Risk Management Association (TRMA), a trade organization created by the telecommunications industry to reduce risk and bad debt, sponsored the study. Most of the major U.S. telecom carriers are members of TRMA and a majority participated in this recent survey. TRMA periodically conducts member surveys on important industry issues. The recent poll, which was completed last week, represents the first step in a comprehensive campaign by TRMA to quantify the impact of consumer fraud on the telecommunications industry and to spearhead an aggressive industry-wide effort to control the problem. Telecom operators have been fighting fraud on their own for some time. But this new campaign aims to identify and deploy "best practices" through open collaboration, information sharing, and education among the major carriers. In late September, the Federal Trade Commission (FTC) issued a report estimating the cost of identity theft to businesses and consumers at $47 billion, annually. According to the FTC, nearly 10 million individuals were victims of identity theft in the last year alone. The personal cost to these individuals was estimated at $5 billion, with the average person spending approximately 30 hours to resolve problems that resulted from the theft of their identity. Cyberspace Criminals Among its top findings, the TRMA study shows that carriers are increasingly challenged by the growing sophistication of fraudsters who now exploit the Internet to create new fraud schemes. When asked what types of fraud they expected in the near future, a majority of telecom providers cited vulnerabilities created by online sales of products and services as their top concerns. Technology: First Line of Defense As the Internet increasingly becomes the preferred playground for fraudsters, technologies that detect identity theft and reduce losses have become more robust and effective in fighting the problem. Many operators are deploying advanced fraud management systems, which, they say, are sharpening their ability to attack this costly and pervasive issue. In terms of current strategies to fight fraud, the TRMA poll reported that two-thirds of the carriers surveyed use fraudster databases, personal verification, and pre-paid systems as their primary lines of defense against fraud. In addition to technology solutions, operators partner routinely with law enforcement and government agencies to provide information and share intelligence. A number of cooperative initiatives are currently underway, including the development of toolkits for victims of identity theft and industry/law enforcement collaboration surrounding the investigation and prosecution of suspected identity thieves. As a result of the surveys overall findings, Plocharczyk said that her committee would immediately begin work to identify the best strategies, technologies and information sharing programs that can result in better fraud detection, containment, and management for the industry. State and Federal Governments Eye Identity Theft Identity theft also has emerged as an important issue on Capitol Hill and in many states affected by the issue. In October, the House of Representatives passed a resolution requiring credit bureaus to provide consumers with a free copy of their credit report -- every year. This measure would enable consumers to quickly identify unauthorized accounts, address changes or other irregularities that are common markers of fraud. The U.S. Senate passed a similar bill in early November. The White House is expected to support both pieces of legislation. A majority of state legislatures also are tackling identity theft issues through a myriad of proposed laws aimed at restricting access to personal information, providing information proactively to consumers, and adding additional safeguards to ens

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: ,
Categories: Payments & Commerce | Mobile Payments
Countries: World
This article is part of category

Payments & Commerce