Tackling SIM Box Fraud with Regulatory Restrictions – A Case Study

Protecting today’s international voice termination revenues is not easy work. Due to sophisticated and evolving fraud techniques, Mobile Network Operators (MNOs) face growing challenges in detecting bypass terminations. The battle becomes even more difficult when Operators must comply with strict Regulatory restrictions that favor mobile subscribers over the Operator’s fraud controls.

Recently, LATRO deployed a Fraud Detection system for an Operator in South America, Operator X, with 74 million Subscribers. Operator X had been experiencing rapidly declining voice traffic volumes / revenue, and they were hoping that LATRO could help provide insight into their ongoing battle against SIM Box fraud. The project scope was simple, detect as many fraudulent SIMs as possible using Test Call Generation (TCG).

Shortly after the start of the project, LATRO learned about the strict National Regulatory restrictions enforced in Operator X’s Country. This entailed all Operators to provide detailed evidence of Fraudulent activity for suspect SIM Cards prior to Blocking. Meaning that Operator X was restricted from blocking fraudulent SIM Cards until the 5^th detection alarm. It was clear to LATRO that this restriction had created an ongoing cycle of revenue leakage for Operator X. Despite the limited project scope (TCG only), the LATRO project team was determined to help Operator X combat these restrictions and protect its revenue.

During the first month of the TCG project, LATRO detected thousands of Fraudulent SIMs. To address the tough regulatory restrictions, LATRO used Machine Learning algorithms to continuously evaluate route performance and peak calling hours all while preventing the Fraudster’s discovery of LATRO’s test numbers. This technique led to multiple detection alarms triggered by LATRO’s TCG for over 42% of Fraudulent SIMs, which allowed Operator X to block SIMs while staying compliant with Regulatory orders.

In just the first five months of the project, Operator X confirmed that LATRO had already provided 30% more fraud detections than the previous vendor. In addition to higher detection volume, LATRO also provided Operator X with enriched detection reports, a customized client portal, and daily analysis. These combined elements helped support a legal case for Operator X against a key Enterprise customer who was directly violating terms of service by using registered Enterprise SIMs for SIM Box bypass fraud. Operator X even verified that the same Enterprise customer was detected several years earlier by a previous vendor. However, Operator X was unable to block the fraudulent SIMs due to lack of detection alarms and supporting evidence provided by their previous vendor.

Thankfully, LATRO was able to not only provide fraud detections but also a detailed analysis and technical explanation as to how the SIMs were deemed fraudulent. This supported Operator X in the successful legal case against the Enterprise customer, which resulted in $100,000 USD in recovered revenue. Additionally, Operator X already has two other open court orders for filing SIM Box Fraud charges against other Enterprise customers that were also detected by LATRO. Operator X is confident that these legal cases will also be successful.

If you are interested to learn more about our SIM Box Bypass Fraud Solutions, please reach out to our team of technical experts.