| September 11, 2020

CTS Connects Podcast: Fraud Mitigation Service

International telecommunications fraud isn’t a “new” problem; but the increased sophistication and speed of modern fraudsters is a challenge that’s too costly for providers to just write off. How are carriers working together to combat fraud in real time? In this inaugural episode of the CTS Connects Podcast series, we welcome Allison Olien, Carlos Belloso, and Scott Englemann to talk about how voice fraud has evolved into a complex, high-tech threat, and what carriers are doing to thwart it in a more unified way.


Speaker 1:                 You're listening to the CTS Connects Podcast from Comcast Technology Solutions. Visit comcasttechnologysolutions.com/cts-connects to explore more.

Phil Voelker:               Well, hello and thank you for joining Comcast Technology Solutions' CTS Connects Podcast. My name is Phil Voelker. I am senior copywriter at Comcast Technology Solutions and I'm doing voice duty today, and we're going to talk about fraud mitigation service or FMS for short. And I've got three guests with us today. The first one is Allison Olien. She is our vice president and general manager for Communications and Technology Provider Solutions. Allison, welcome.

Alison Olien:              Hey Phil. Thanks for having me.

Phil Voelker:               Oh, thanks for joining. Next, we also have Carlos Belloso. Carlos is our Senior Director of Product Management working with Allison. Carlos, welcome.

Carlos Belloso:          Thanks Phil. Good to be here.

Phil Voelker:               Oh, it's a pleasure. And last, but certainly not least, we have Scott Engelmann who is one of our senior sales engineers who has helped develop fraud mitigation service. Scott, welcome.

Scott Engelmann:        Thanks Phil, glad to be here.

Phil Voelker:               Fantastic. All right, my friends, to set the stage, it's not like fraud through international calling just magically popped up a couple of years ago. I think about my old days back in US West back at the old phone company, it's always been a problem. It's just something that was looked at as a cost of doing business. It was a write-off like retail stores would expect a certain amount of theft to happen. There was a certain amount of fraud that was expected to happen. But as technology has gotten more and more advanced and fraudsters have gotten more sophisticated, it's getting expensive.

                                   So really just to open the floor to you, guys. Carlos, why don't you give us a little bit of a background on what brought us to this? What makes fraud mitigation more of an issue now than it was like 10 years ago?

Carlos Belloso:           Sure thing, like you said, fraud's not new and rather than it being more of an issue, it's just becoming harder and harder to fight it. I think a lot of that is based on just the evolution of technology and what that technology can be used for, for good or evil. Sometimes the ability to use that same technology to fight those who choose not to use it for good can be a challenge. And so we've seen even though Comcast and pretty much all carriers out there have some sort of fraud mitigation system within their networks, for a while, it seemed like no matter what we did, these fraudsters would just find ways and nooks and crannies and new patterns on how to get around that internal system.

                                   So we also had to start exploring all options. And last year, after a lot of vetting, we implemented a solution that reaches a whole lot of international carriers. It's a managed service and it's really been a great complementary service to our internal systems.

Phil Voelker:               Fantastic. Yeah, I guess maybe a great way to get into it is talk a little bit about what are some of the main types of fraud we're seeing and how does FMS move us into that more sort of a proactive response?

Scott Engelmann:       Yeah, so when we got into this, we noticed that there were a number of different types of fraud attacks that our customers were experiencing. The big one that seemed to occur the most were PBX or account hacks where the fraudsters will actually try to figure out or they'll get a back door into a customer's network and then basically place fraudulent calls via the customer's PBX without the customer even knowing about it.

                                   There's another type of attack known as a call hijacking attack where calls will be placed. And it's like a man in the middle attack. A fraudster will put the call and basically redirected to a premium rate number without the originating party knowing about it.

                                   You also have Wangiri attacks, which are basically fraudsters making calls, the one ring. People are curious by nature and then they'll call back to see who it was. And then when you call back, you call back to this premium destination, which you'll start racking up the charges.

Phil Voelker:               Gotcha. So with the Wangiri attack, it's that callback that triggers the action, right, the fraud action?

Scott Engelmann:       Correct, correct. That's how they make their money.

Phil Voelker:               So a main question that I have is, are we seeing more of these types of fraud? Is it just that it's just happening so rapidly? Is it from a technology standpoint that whatever fraudsters are out there can just continue to attack? Is that what the issue is?

Scott Engelmann:        As these attacks become more and more sophisticated, these fraudsters seem to be one step ahead. They're trying to figure out, well, how can I make my next dollar? So they're thinking of new and creative ways on how to attack networks, get people to run up charges on numbers that they don't even know that they're calling sometimes.

Phil Voelker:               Gotcha. So one of the questions that I've got, Allison, maybe you can answer this for me, is in with FMS as opposed to older fraud systems, it occurs to me that one of the biggest challenges is that you could be fighting fraud within your company, but that same fraud could have taken place with another carrier. What does FMS do to sort of help gang up on fraud for lack of a better term?

Alison Olien:               Yeah. I think you used the best word is you kind of are ganging up on fraud trying to use all of the groups in the industry to basically identify what numbers are fraudulent and making sure that's a shared part of this service. And that's really what FMS does is it really helps give you the leg up on what numbers you should be looking for. And then it kind of does that for you so that you're not having to do all that fighting in your own network. And I think that's kind of an insurance policy is what I would call it is that you basically have a little globe of protection around you. And yeah, sometimes the calls get through but they get stopped pretty quickly or they stop completely. And that's the big advantage of FMS.

Phil Voelker:                Fantastic. So somebody help me explain or help me understand the architecture a little bit. So you've got people who are monitoring to see if fraud pops up, but you've also got some sort of an automated component, what is it? And I mean, if there's other data coming in from other carriers, what does that look like?

Scott Engelmann:       Yeah, so I'll take that, Phil. So there's basically three types of blocking mechanisms that we have or three different categories of blocks. One will be what we call a database block. And basically, the database is a list of known origination and destination and telephone numbers that have appeared in fraud events in the past. So that's one type of block. And if a fraudulent call is set up and either the origination and destination number is in that call, then it runs up against the database. And if there's a match it's automatically blocked.

                                    The second type of blocking category we have is what we call auto blocking rules. These are rules that Comcast and the FMS vendor who who's working with us have set up and with these rules, a little bit of fraud will get through and we need that to happen so the call constraints can be tripped. And once those call constraints are tripped on a specific auto blocking rule, then every call that matches that rule going forward for a certain period of time will be blocked.

                                    And then as you said earlier, the third type of category for a blocking rules are what we call the eyes on glass. If it doesn't fit the database set, it doesn't fit the auto blocking rule set, then we have a team of fraud engineers that are constantly monitoring the traffic and they look for suspicious patterns. And if they see a suspicious pattern, we've instructed them to implement a block immediately.

Carlos Belloso:           So to add to that, it's not the architecture, but rather part of the call flow. We provide a service, usually carriers that are routing voice traffic. They do it through what's called the least cost routing engine. So it's usually chasing the lowest cost. All this is it's usually not the lowest cost because it has all these direct relationships to accomplish all the things that Scott just described. But basically, the customer, and in our case, Comcast, is forced routing certain destinations to this solution so that it's not necessarily every single destination, but high fraud destinations that are known for this kind of activity.

                                    And to tie it back to the point that Allison was making, a lot of these fraudsters tend to have their niche. So they are the PBX hackers or they're this kind of fraud. I guess just like hackers in general, they have their specialties. And so with that comes using a lot of the same fraudulent numbers. And so the idea is to funnel as much of this traffic that's originated by other carriers that originate traffic the way Comcast does that are exposed to PBX hacks, et cetera. And so when we offer this LCR service, but with this added layer of protection, then we're all benefiting from that hacker making one cable company play whack-a-mole and then Comcast play whack-a-mole and then somebody else play whack-a-mole. It basically says, okay, to Scott's point, the system has to be able to identify a trend. There's a lot more power in identifying a trend that aggregates 10 different carriers, 50 different carriers traffic than trying to do that one carrier at a time.

Phil Voelker:               Right? So the whack-a-mole analogy is excellent. So not only are you waiting to see if a fraudster pops its head up, once it does and you knock it down, it's kind of an elegant way to sort of leverage the intelligence from all of these other carriers, because now you know that hole, for lack of a better term, is identified.

Carlos Belloso:           Exactly.

Phil Voelker:               Gotcha. Allison, you and I had spoken earlier about FMS and that part of the challenge is, of course, it's fraud mitigation. So it's not the sexiest thing out there, it's not going to bring you a lot of revenue, it's about revenue protection. But a lot of carriers come and talk about a solution like this after this kind of stuff has already happened to them, right?

Alison Olien:               That's correct, Phil and I think that's one of the things that, of course, our team has been trying to let our customers know about this service and that don't be a victim of a huge PBX hack or some of the other things that Scott was describing. Try to fix that before it becomes a problem. Similar to you take care of setting yourself up for a hurricane before the hurricane comes through or right before. It's already passed, it's not going to help you. So it's kind of a similar, not exactly, we're talking about destruction of property versus actually lost cost and revenue because you're actually having to deal with a lot of expense that you shouldn't have to. So similar if you want to think about it.

Phil Voelker:               And it's not just, I don't mean to speak for you, but I would assume that it's not just about the revenue that you lose during that call or from that fraud instance, it's also the revenue or the trust that you lose with your customers. And so it's not just about you as a carrier protecting your interests. It's about you creating an environment that's safer and more trustworthy for the people who are paying you for your service.

Carlos Belloso:           You'd be surprised how many times we have spoken with customers, suggested the solution, and then they get defrauded. We end up seeing it on our network. We're not allowed to block any calls on behalf of our customers unless they actually purchase FMS and give us the ability to do that.

Phil Voelker:               That's a regulatory issue, isn't it?

Carlos Belloso:           And legal. Our agreements say you can't manipulate, you can't do anything to the calls. You just got to pass them through as an intermediate provider. And when they get hacked and it's expensive. These can range from a $2,000 instance to $300,000 within a day to three days. It racks up super, super fast. And it's not like there's a lot of margin for those of us who carry the fraud.

                                    And then we have a difficult conversation with the carrier who says, "Oh, well, what can you do to help me out on these expenses?" At the end of the day, the wholesale businesses are low margin businesses and there's not a whole lot we can do in the first place. In fact, we price those low, as low as we can, knowing that if they get defrauded, they're going to pay the lowest price anyway. But when we go back to them and say, "Look, we've talked to you before about FMS and it's there," there are those who have stubbed their toe enough times to go and say, "Okay, look, I got to try this" because sometimes it only takes once for a customer to say, "Okay, I got to have this insurance." Sometimes it takes stubbing your toe a few times.

                                    And honestly, there's what you mentioned earlier, Phil. This has been a part of the business for so long that there are some carriers that continue to just write it off, which everybody is going to run their business however they want. But there's no question that while you're getting that insurance policy as a complementary service to whatever fraud mitigation system you have in your network, you're getting a lot of benefit beyond the insurance and it always feels good to fight the fraudsters quite frankly, because it's just ...

Phil Voelker:               Satisfying.

Carlos Belloso:           Exactly. But then on top of that, all of this really works through ... Besides the technical capabilities that monitor and identifies patterns, there's also direct relationships with international carriers that know what is a real call to their country and what is not. And so having to have that relationship allows for a direct connection as close to the source as possible. And that's always going to improve. Anything in technology that's more directly connected is going to improve the customer experience also.

Phil Voelker:               Absolutely. And I mean, we're a provider too, right? I mean, we're part of a provider. And so we know that margins aren't getting any bigger by themselves, right?

Carlos Belloso:           Yeah.

Phil Voelker:               So any opportunity that you can do to improve the situation is probably worth looking at.

Carlos Belloso:            Yeah.

Alison Olien:               And Phil, that's a good point because I think, and Carlos can probably delve in this even better than me, but we tried the service first with Comcast to prove it was working for our digital voice service and found out how valuable it was and how much fraud it was truly protecting getting into the network.

Carlos Belloso:            Exactly. To that end, even though we are offering this and selling it to our wholesale customers, first and foremost, we're the customer too. So anything that we're able to do that identifies a problem for a customer's customer is equally a risk of becoming a problem for our Comcast customer as well. So it's a win-win all around.

Phil Voelker:                Absolutely. Well, I certainly learned a lot more about the fraud mitigation service. I'm assuming that if folks would like to learn more about it, I mean, I know you guys have got some great case studies and some concrete details. Should they just come out to comcasttechnologysolutions.com and learn more?

Carlos Belloso:           Yes, absolutely. And we can be engaged through there also, through that website.

Phil Voelker:                Fantastic. Well, Allison Olien, Carlos Belloso, Scott Engelmann, thanks so much for joining us. I appreciate it very much. I appreciate you taking the time out to get on this podcast and teach us a little something.

Alison Olien:               Thanks for having us, Phil.

Carlos Belloso:           Yeah, thank you.

Scott Engelmann:       Thanks Phil.

Phil Voelker:               Absolutely, and to all of you listening, thanks for joining us. This is Phil Voelker, again, with Comcast Technology Solutions and come visit us. We got a lot to share. Thanks very much.

Carlos Belloso:            And to all those fraudsters, watch out. We're coming for you.

Speaker 1:                  Thanks for joining us for the CTS Connects Podcast. Visit comcasttechnologysolutions.com/CTS-connects to explore this and other topics.