Revenue Assurance

Punctured profits & Fraud Management

Presentation by Anil Kumar

Punctured Profits & Fraud Management.

What impacts profits?

Shrinking of the Top Line loss of revenues Increase in Cost lines Impact = A Hole in the companys profits

Punctured Profits & Fraud Management.

Examples..
Enron, Worldcom and many more
Impact collapse of organisations Also collapse of Audit & Consulting firm Impact = A Big Hole in the companys profits Investors losing their money, people rendered jobless
Punctured Profits & Fraud Management.

Cycle of Telecom Services

Market products Provide service

Develop and price products

Sell products

Manage customer & carrier relations

Rate and Bill

Account and report

Manage Network Infrastructure

Manage receivables and fraud

Punctured Profits & Fraud Management.

Revenue Leakage Possibilities

Developing and pricing of Products
Launch of products without adequate testing in a hurry to launch first e.g VAS. Launch products without technology support to ensure there is no revenue leakage. Tariff changes at short notice to counter competition.

Punctured Profits & Fraud Management.

Revenue Risk Opportunities

Selling of Products Sales without adequate verification of customers. Re entry of fraudulent customers. Fictitious activations/sales to earn more commissions. Provision of services without corresponding checks and balances to prevent high exposures.

Punctured Profits & Fraud Management.

Revenue Risk Opportunities

Network infrastructure Inadequate capacity deployment of sites at high contribution areas like roaming. Inaccurate usage capturing. Inadequate control over switch databases Inadequate controls over provisioning Fraudulent usage of test SIMS/phones

Punctured Profits & Fraud Management.

Fraud Opportunities
Manage Carrier Relations
Roaming frauds Carrier contracts and billing

Punctured Profits & Fraud Management.

Fraud Opportunities
Service Provisioning
Launch of new products/Value added services Inadequate controls over SIMS and recharge coupon pins. Recharging frauds.

Punctured Profits & Fraud Management.

Revenue Risk Opportunities

Rating and Billing
Inaccurate configuration of tariff tables. Inadequate Controls over Bill plan changes Weak Controls over free airtime connections Inadequate Controls over rating of CDRs Weak Controls over bill generation Controls over customer files/balances International Long distance grey calling.

Punctured Profits & Fraud Management.

Collection Fraud possibilities

Manage Receivables
Credit limit fixation
Non-adherence to credit policy Non monitoring of high usage Cash management through Collection agencies Payments through credit cards Non allocation of cases to collection agencies. Non Barring of services to defaulting customers.
Punctured Profits & Fraud Management.

Revenue Reporting Risks

Account & Report
Improper subscriber nos. reporting Inflating revenue figures Under-reporting of bad debts

Punctured Profits & Fraud Management.

Risks to Costlines
Payments for leased lines not in use. Deployment of network elements with inadequate utilization. Inadequate controls over energy costs.

Inadequate verification of Interconnect charges payable

to other operators. Overcharging by content providers and call center agencies.
Punctured Profits & Fraud Management.

Fraud Opportunities
Account & Report
Improper subscriber nos. reporting Inflating revenue figures Under-reporting of bad debts

Punctured Profits & Fraud Management.

Fraud illustrations
Area of Risk

Prevention techniques

Non rating of Zero Duration Calls Non configuration of certain destinations in the IN platform Subscribers not billed for considerable period of time Free airtime given to distributors/subscribers without adequate authority Unauthorised bill plan changes

Configuration checks
Rejected call analysis.

Reconciliation of active customers vs. billed Regular review of FAT connections. Control log for bill plan changes

Punctured Profits & Fraud Management.

Fraud illustrations
Area of Risk
Activating roaming with call conferencing facility without proper credit verification

Prevention Techniques
1.
2.

Keeping activation of VAS as centralised. No VAS activation without credit verification.

Leakage of information regarding prepaid customer database to the competitors

1.

2.

Stringent IT controls over data copying, mailing & printing Confidentiality clause with outsourced agencies

Punctured Profits & Fraud Management.

Fraud illustrations NLD/ILD

Area of Risk
High termination charges in the case of Sex lines paid by the ILD operators for traffic on international lines. e.g. Deigo Garcia.
Call routing

Prevention Techniques

Specific clauses in the agreement. Regular monitoring of high traffic to few numbers.

Review of Least call routes and data analysis of call carrying.

Punctured Profits & Fraud Management.

How frequently are the IT security compliance results measured by your organisation?

Source: KPMG India Fraud Survey Report 2006

Punctured Profits & Fraud Management.

How was it detected?

Source: KPMG India Fraud Survey Report 2006

Punctured Profits & Fraud Management.

In which of these areas did the majority of Rupee losses occur?

Source: KPMG India Fraud Survey Report 2006

Punctured Profits & Fraud Management.

What is the medium available to employees to report wrongdoing in the organisation?

Source: KPMG India Fraud Survey Report 2006

Punctured Profits & Fraud Management.

QUESTIONS ?

Punctured Profits & Fraud Management.

THANK YOU

Punctured Profits & Fraud Management.