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Detecting Fraud in Cellular Telephone Networks

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Detecting Fraud in Cellular Telephone Networks Islamic University of Gaza Deanery of Graduate Studies Faculty of Commerce Department of Business Administration Detecting Fraud in Cellular Telephone Networks "JAWWAL" Case Study By Hiyam Ali El Tawashi Supervised By Prof. Yousef Hussein Ashour “A Thesis Presented in Partial Fulfillment of the Requirement for the Degree in "MBA" August, 2010 ﺑﺴﻢ ﺍﷲ ﺍﻟﺮﲪﻦ ﺍﻟﺮﺣﻴﻢ (ﻭﺇِﻥ ﻳﺮِﻳﺪﻭﺍْ ﺃَﻥ ﻳﺨْﺪﻋﻮﻙَ ﻓَﺈِﻥ ﺣﺴﺒﻚ ﺍﻟﻠّﻪ ﻫﻮ ﺍﻟﱠﺬﻱ ﺃَﻳﺪﻙَ ﺑِﻨﺼﺮِﻩ ﻭﺑِﺎﻟْﻤﺆﻣﻨﲔ ) [ﺍﻷﻨﻔﺎل: 62] III Detecting Fraud in Cellular Telephone Networks "JAWWAL" Case Study ABSTRACT Telecommunication fraud is a problem that has grown dramatically over the past ten years. Fraud become a serious global issue for mobile network service providers, it has undoubtedly become a significant source of revenue losses and bad debts to telecommunication industry, and with the expected continuing growth in revenue it can be expected that fraud will increase proportionally. The research project therefore, focused on how Jawwal Company managing and detecting the fraud, in order to modify the current tools for more effective fraud prevention and detection, for this reason the researcher undertook a set of actions that are reported as follow: First step it was necessary to understand the problem of telecom fraud, then to know what makes people perpetrate the fraud, and which are the most prevalent fraud types that are occurring, clarifying which is the likely products and services to be attacked, what source of information to facilitate the fraud, how fraudsters perpetrate the fraud finally explaining the fraud detection and prevention procedures. Then apply the study on Jawwal Company as study case, by distributing 200 questionnaires to targeted sections, and analyzing the result which shows that the current fraud management at Jawwal Company is not efficient and needs to be modified. IV ﻣﻨﻊ ﺍﻟﺘﺤﺎﻳﻞ ﰲ ﺷﺒﻜﺎﺕ ﺍﳍﻮﺍﺗﻒ ﺍﳋﻠﻮﻳﺔ ﺩﺭﺍﺳﺔ ﺣﺎﻟﺔ (ﺷﺮﻛﺔ ﺟﻮﺍﻝ) Arabic abstract ﺘﻔﺎﻗﻤﺕ ﻤﺸﻜﻠﺔ ﺍﻟﺘﺤﺎﻴل ﻋﻠﻰ ﺸﺒﻜﺎﺕ ﺍﻻﺘﺼﺎﻻﺕ ﺨﻼل ﺍﻟﻌﺸﺭﺓ ﺴﻨﻭﺍﺕ ﺍﻟﻤﺎﻀﻴﺔ ، ﻭﻟﻬﺫﺍ ﻫﻨﺎﻟﻙ ﺍﻫﺘﻤﺎﻡ ﻋﺎﻟﻤﻲ ﺒﻤﻭﻀﻭﻉ ﻤﻨﻊ ﺍﻟﺘﺤﺎﻴل ، ﻭﻻ ﺸﻙ ﺃﻨﻪ ﻜﻠﻤﺎ ﺯﺍﺩﺕ ﺍﻟﺭﻏﺒﺔ ﻓﻲ ﺘﺤﻘﻴﻕ ﺍﻟﻤﺯﻴﺩ ﻤﻥ ﺍﻷﺭﺒﺎﺡ ﺴﻴﻘﺎﺒل ﺫﻟﻙ ﺒﺯﻴﺎﺩﺓ ﻤﺨﺎﻁﺭ ﺍﻟﺘﺤﺎﻴل. ﻓﻲ ﻫﺫﺍ ﺍﻟﺒﺤﺙ، ﻨﺎﻗﺵ ﺍﻟﺒﺎﺤﺙ ﻜﻴﻔﻴﺔ ﺇﺩﺍﺭﺓ ﻤﺸﻜﻠﺔ ﺍﻟﺘﺤﺎﻴل ﻤﻥ ﻗﺒل ﺸﺭﻜﺔ ﺍﻻﺘﺼﺎﻻﺕ ﺍﻟﺨﻠﻭﻴﺔ ﺍﻟﻔﻠﺴﻁﻴﻨﻴﺔ ﺠﻭﺍل . ﻭﺫﻟﻙ ﺒﻬﺩﻑ ﺘﻘﻭﻴﻡ ﺍﻟﻁﺭﻕ ﻭﺍﻷﺴﺎﻟﻴﺏ ﺍﻟﺤﺎﻟﻴﺔ ﻤﻥ ﺃﺠل ﻓﻌﺎﻟﻴﺔ ﺃﻜﺜﺭ ﻓﻲ ﺍﻟﺘﻌﺎﻤل ﻤﻊ ﻤﺸﻜﻠﺔ ﺍﻟﺘﺤﺎﻴل. ﺒﺩﺍﻴﺔ ﻗﺎﻡ ﺍﻟﺒﺎﺤﺙ ﺒﺎﻹﺤﺎﻁﺔ ﺒﺠﻤﻴﻊ ﺠﻭﺍﻨﺏ ﻤﺸﻜﻠﺔ ﺍﻟﺘﺤﺎﻴل ، ﻤﻥ ﺨﻼل ﺘﻌﺭﻴﻑ ﻤﺸﻜﻠﺔ ﺍﻟﺘﺤﺎﻴل ﻭﻓﻬﻡ ﺩﻭﺍﻓﻊ ﺍﻟﻤﺸﺘﺭﻜﻴﻥ ﻟﻠﻘﻴﺎﻡ ﺒﻬﺎ، ﻭﻤﻥ ﺜﻡ ﺘﻭﻀﻴﺢ ﺃﻨﻭﺍﻉ ﺍﻟﺘﺤﺎﻴل ﻭﻤﺎ ﻫﻲ ﺃﻜﺜﺭ ﺍﻟﺨﺩﻤﺎﺕ ﻭﺍﻟﻤﻨﺘﺠﺎﺕ ﻋﺭﻀﺔ ﻟﻠﺘﺤﺎﻴل ﻭﻤﺎ ﻫﻲ ﻗﻨﻭﺍﺕ ﺍﻟﻤﻌﻠﻭﻤﺎﺕ ﺍﻟﺘﻲ ﺘﺴﻬل ﺍﺭﺘﻜﺎﺏ ﺍﻟﺘﺤﺎﻴل ، ﻭﻓـﻲ ﺍﻟﻨﻬﺎﻴـﺔ ﺍﺴﺘﻭﻀـﺢ ﺍﻟﺒﺎﺤﺙ ﻜﻴﻑ ﺘﺘﻡ ﺍﻟﻭﻗﺎﻴﺔ ﻭﺍﻟﻤﻨﻊ ﻟﻠﺘﺤﺎﻴل، ﻭﻟﻘﺩ ﺍﺴﺘﺨﺩﻡ ﺍﻟﺒﺎﺤﺙ ﺍﻟﻤﻨﻬﺞ ﺍﻟﻭﺼﻔﻲ ﺍﻟﺘﺤﻠﻴﻠﻲ. ﻗﺎﻡ ﺍﻟﺒﺎﺤﺙ ﺒﺎﻟﺩﺭﺍﺴﺔ ﺍﻟﻤﻴﺩﺍﻨﻴﺔ ﻤﻥ ﺨﻼل ﺘﻭﺯﻴﻊ 200 ﺍﺴﺘﺒﺎﻥ ﻋﻠﻰ ﺃﻓﺭﺍﺩ ﺍﻟﻌﻴﻨﺔ ، ﺜﻡ ﺒﺘﺤﻠﻴـل ﺍﻟﻨﺘﺎﺌﺞ ﺍﻟﺘﻲ ﻜﺎﻥ ﺃﻫﻤﻬﺎ ﺃﻥ ﻭﺴﺎﺌل ﻭﺃﺴﺎﻟﻴﺏ ﻤﻨﻊ ﺍﻟﺘﺤﺎﻴل ﻓﻲ ﺸﺭﻜﺔ ﺍﻻﺘﺼﺎﻻﺕ ﺍﻟﺨﻠﻭﻴﺔ ﺠﻭﺍل ﻏﻴـﺭ ﻓﻌﺎﻟﺔ ﻭﺒﺤﺎﺠﺔ ﺇﻟﻰ ﺘﻘﻭﻴﻡ ﻟﺘﺼﺒﺢ ﺃﻜﺜﺭ ﻓﻌﺎﻟﻴﺔ. V ACKNOWLEDGEMENT I would like to express my sincere gratitude to my supervisor Prof. Dr. Yousif Ashour, for his valuable guidance and advice. He has been very supportive and patient throughout the progress of my thesis. VI DEDICATES I dedicate this work to: • My parents'… • My son… • My colleagues at Jawwal Company… VII LIST OF ACRONYMS 3G Third Generation AUC Authentication Center CDR Call Detail Record CFCA Communications Fraud Control Association DAM Direct Access Method DISA Defense Information Security Agency Direct Inward System Access DTMF Dual Tone Multi Frequency EL External Linkages ETSI European Telecommunications Standards Institute FIINA Forum for International Irregular Network Access FMS Fraud Management System GPRS General Packet Radio Service GSM Global System for Mobile Communications HLR Home Location Register HRN Hidden Recharge Number HUR High Usage Report ID Identity Document IDA Indirect Access IDD International Direct Dealing IMEI International Mobile Equipment Identity IMSl International Mobile Subscriber Identity IP Internet Protocol IRS Internal Revenue Service ITU International Telecommunication Union KI Individual Subscriber Authentication Key KPls Key Performance Indicators LAN Local Area Network MSISDN Mobile Subscriber ISDN number NRTRDE Near Real Time Roaming Data Exchange OPCOs Operating Countries VIII PBX Private Branch Exchange PDA Personal Digital Assistant PIN Personal Identification Number PLMN Public Land Mobile Network PRS Premium Rate Service PTT Postal Telephone and Telegraph SDR Service Difficulty Reports SIM Subscriber Identity Module SLU Single Line Unit SMS Short Message Service TAP Test Access Path TUFF Telecommunications UK Fraud Forum VAS Value Added Services VolP Voice Over Internet Protocol VPN Virtual private Network WAN Wide Area Network WAP Wireless Application Protocol IX TABLE OF CONTENTS Abstract..............................................................................................................................IV Arabic abstract...................................................................................................................V Acknowledgement..............................................................................................................VI List of acronyms.............................................................................................................VIII Table of contents.................................................................................................................X List of tables.....................................................................................................................XV List of figures..................................................................................................................XIX CHAPTER [1]: INTRODUCTION ...........................................................1 1. 1 Background to the Study.............................................................................................2 1. 2 Difficulties in Detecting Fraud....................................................................................2 1. 3 Definitions of Terms to be used in the Research ........................................................4 1. 3. 1 Telecommunication Fraud...................................................................................4 1. 3. 2 Bad Debts.............................................................................................................4 1. 3. 3 Revenue Assurances............................................................................................4 1. 3. 4 Fraud Prevention..................................................................................................4 1. 3. 5 Fraud Detection....................................................................................................4 1. 4 Statement of the Problem ............................................................................................5 1. 5 Research Variables......................................................................................................5 1. 6 Objectives of the Study ...............................................................................................5 1. 7 Importance of the study...............................................................................................6 1. 8 limitations of the study................................................................................................6 1.9 Research Design...........................................................................................................7 CHAPTER [2]: LITERATURE REVIEW................................................9 SECTION 1: TELECOM FRAUD OVERVIEW.......................................................10 2. 1. 1 What is Telecom Fraud?....................................................................................11 2. 1. 2 Some Recent Figure about Telecom Fraud........................................................11 2. 1. 3 Some Factors Leading to Telecom Fraud..........................................................12 2. 1. 4 Where Doe's Fraud Exists?................................................................................12 2. 1. 5 Does Fraud Differ by Geography?.....................................................................12 2. 1. 6 How Much Damage is Fraud Doing?................................................................13 2. 1. 7 What is The Real Cost of Fraud?.......................................................................13 2. 1. 8 Fraud Positioning Approaches...........................................................................14 2. 1. 9 Fraud Management Approaches........................................................................15 2. 1. 9. 1 FM Approach 1...................................................................................15 2. 1. 9. 2 FM Approach 2.................................................................................16 2. 1. 9 . 3 FM Approaches 3..............................................................................16 2. 1. 9. 4 FM Approach 4.................................................................................16 2. 1. 10 What's the Difference Between a Fraud and a Bad Debt?...............................17 2. 1. 10. 1 Effects and Impact of Bad Debt.......................................................17 2. 1. 10. 2 Effects and Impact of Fraud.............................................................17 SECTION 2: WHAT MAKES PEOPLE PREPERATE THE FRAUD...................19 2. 2. 1 Who Actually Commits Fraud?.........................................................................20 2. 2. 2 Where Do Fraudsters Work From?....................................................................20
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