ORLANDO, Fla.-The term convergence means different things to different people. To some, convergence means bundling and selling more than one product to a customer. To others, convergence means merging different companies together for size and scope.
So how do carriers combat fraud in a converging environment when people cannot even agree on what convergence means? This was the theme of a panel on convergence last week at Wireless Fraud and Security ’99, sponsored by the Cellular Telecommunications Industry Association.
Since many carriers simultaneously are working on both types of convergence, combating fraud can get complicated, especially when fraudsters can capitalize on either scenario.
“Offer a single service, and I will find a way to steal it. Offer a bundled service and I will find a way to steal the whole bundle,” said Meg Haight, assistant vice president of employee and asset protection of GTE Service Corp., quoting the fraudster mentality.
Carriers believe bundled products are attractive to consumers because they only have to deal with one company for all of their telecommunications needs. Carriers know bundling is good for their business, especially if local exchange service can be included in the bundle to reduce churn, Haight said.
Bundling can be an advantage to the carrier that wants to combat fraud if all of the products use the same databases and have the same commitment to fraud protection. However, that doesn’t mean each product offering uses the same fraud protection tools.
Lightbridge Inc.’s Michelle Wheeler suggested carriers customize their training. “Everybody needs to understand what the issues are and how to deal with them,” but everybody doesn’t need to know the same things.
Bundling can be a disadvantage if distribution channels are not committed to catching fraud. “Business partners will not see fraud as one of their highest priorities as they try to meet quotas,” Haight said.
A big problem for carriers is determining when fraud is occurring instead of when a consumer is just fully using a wireless phone since the profile of the best customer can also be the profile of a fraudster, Wheeler said. Indeed, Wheeler said Sprint PCS found this to be the case in 1997. Tracking usage can combat this. “Knowing who your customer is and being able to watch them is a key component,” Wheeler said.
You should also determine who should be a customer. “The best way to handle fraud is to never let them on your network. It is important to screen every account,” Wheeler said.
As companies merge, many weak links will develop that will allow fraudsters to attack on different fronts since “fraud goes to the weakest link,” said John Frost, fraud management consultant of Compaq Computer Corp. This breeds more opportunity for fraudsters, agreed Wheeler.
As companies merge, the various segments might have different definitions of fraud, which can create problems, Frost warned. Merging companies may not want to spend the resources to buy or upgrade fraud protection products, but this is necessary because products are always changing, Frost said.
