Coming to Terms with Cellular Fraud

By Pelland, Dave | Risk Management, March 1995 | Go to article overview

Coming to Terms with Cellular Fraud


Pelland, Dave, Risk Management


Although eliminating fraud remains a very elusive dream, cellular telephone carriers are attacking the problem with a multi-faceted approach that combines industry cooperation and education with new technology.

One of the most challenging aspects of trying to manage this expensive risk is that it evolves very quickly. Every solution the industry has developed so far presents a new challenge for cellular criminals, forcing carriers to develop several generations of anti-fraud measures at the same time. "Whatever you do in the technology area, the bad guys just adapt," says Roseanna DeMaria, vice president of revenue security for McCaw Cellular. "From the carriers' perspective, you have to develop a multi-faceted attack.

The biggest risk for cellular carriers is the "cloning" of legitimate phones. Every cellular phone transmits not only voices but also an electronic serial number (ESN) that tells the carrier which account to bill for the call. Unfortunately for the carriers, t]ye ESN is easily intercepted off the air with equipment that can be purchased through the mail. A cellular phone can then be reprogrammed to transmit the purloined ESN, instead of its own, so any calls made with the clone are billed to the legitimate phone - giving criminals free, anonymous access to cellular networks.

It is an expensive problem with no easy answers. Industry estimates of fraud losses range from $365 million to more than $1 billion annually. Apart from the cost, which is borne mostly by the carriers, the cellular industry faces the extra challenge of improving its security without inconveniencing legitimate customers.

"People used to think cellular fraud was a victimless crime, and that it only took away revenue from big companies," says NYNEX spokesperson Kim Ancin. "That's not the case. It hurts the customers because the carriers aren't able to reduce their rates, and the more cloned calls that are on the air, the harder it is for legitimate customers to use the network."

The carriers' first line of defense is requiring customers to enter personal identification numbers (PINS) before a call can be placed. When the phone is turned off, it is electronically blocked from accessing the cellular network until the legitimate user re-enters a PIN. This method helps somewhat, but no one in the industry expects the protection to last very long.

Somewhat more sophisticated is using software to monitor customer calling patterns. if phone use deviates from normal trends, the carrier can contact the customer and ask if he's called Bogota 40 times in the last hour. Carriers are also testing a method called phone printing, which involves analyzing the transmission characteristics of individual phones to create a kind of electronic fingerprint for the legitimate phone. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Coming to Terms with Cellular Fraud
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.