TRMA Telecommunications Risk Management Association – A team huddle for telcos

16/04/2022

TRMA Telecommunications Risk Management Association – A team huddle for telcos | Whats Next

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TRMA Telecommunications Risk
Management Association – A team
huddle for telcos
The telco space is one of constant change. “Always on” consumer demand is
driving exponential growth, and, although we can agree growth is good, it also
creates its own set of unique problems. While fraud has always existed, the
stakes are very high in this space. Carriers have and continue to invest trillions
to ensure their networks are solid, their service is memorable and options
diverse, but in the background, there are fraudsters scheming and consumers
walking away from their financial responsibilities, leaving carriers to hold the
bag.
Selena Castellanos
Posted October 17, 2019

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16/04/2022

TRMA Telecommunications Risk Management Association – A team huddle for telcos | Whats Next

Today’s telcos are facing unprecedented fraudulent attacks. Fraudsters are outpacing
solutions and evolving their schemes daily. In this digital climate, carriers want to offer the
most robust options for engagement, payment and potential sales, supporting a true omnichannel experience. Whether subscribers engage on mobile, phone, web or (more than likely)
a series of each during one interaction, these various options can mean vulnerabilities for both
the consumer and the carrier alike.
Statista reported in August 2019 that the average handset in North America cost $521,
and—let’s be real here—if you enjoy the top-of-the-line iPhone or Samsung, you will likely pay
north of $800. Keep in mind this does not include the monthly mobile bill; when you total it all
up, people spend a lot of money here, rarely put their phone down and expect top tier service.
TRMA was established as a place for carriers to meet and discuss trends and best practices,
banding together to help combat the challenges they face. With an estimated 2% of revenue
lost to bad debt and upwards of 10% lost to fraud, you can see why this organization is
important to carriers.
Having had the opportunity to attend the fall session of TRMA in Nashville this week, I got to
hear firsthand both the challenges and solutions around fraud and collections, and I’m leaving
with renewed optimism, information and a few new friends.

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16/04/2022

TRMA Telecommunications Risk Management Association – A team huddle for telcos | Whats Next

Collections insights
While collections are not an area that my work touches often, it was astounding to understand
how vast and pervasive this area can be. Our sessions began by looking at
Champion/Challenger modeling, a technique that allows you to model several strategies or
campaigns against each other to see which make the greatest impact. Carriers are using this
to look at their various approaches in debt collection, but also how to retain those customers

given the cost is so high for customer acquisition.
In addition to the importance of business and strategy modeling was the idea that marketing
and risk teams need to be more closely aligned. As you can imagine, these two groups are
oftentimes in a push/pull situation. Marketing is trying to get customers to buy the latest
package and risk says the consumer cannot qualify for the package…this can create an
adversarial climate. Working together, creating packages and models for everyone to win is
the goal. The example might be like selling a car. Not everyone will qualify for the latest, fully
loaded BMW, but it behooves the entire team to find the right Ford Escape to make the
customer happy and financially capable.
If the customer ultimately does get into financial trouble, the goal is to work with them in a
positive way, to create a positive customer experience, even amidst a challenging situation.

Fraud trends
Fraud is a very real problem for both consumers and carriers alike. During this TRMA session,
it became clear that fraud evolves over time and we can see what might have been prevalent
last year, has since died down this year. Much of the behaviors we see can be tied directly to
the economy. During a slower economic time like a recession where more financial stressors
are seen, the fraud strategies can change.
Most prominent fraud trends:
First-party fraud – someone uses their own identity to carry out fraud. An example
of this might be credit mulling or using your own credit to acquire goods with no
intention of paying it back. Think about items that can be turned around quickly for
money like handsets.
Synthetic fraud (fake credit) – the major crime of the moment. This includes credit
washing and social security theft. Credit washing is when the user claims the item on
their credit report is fake, essentially removing a bad debt or washing their credit.
There is a surge in the auto industry, but telco is also feeling the sting.
Third-party fraud – while identity theft is currently down, it’s not out. It happens
during economic down turns or with family fraud (stealing information from relatives’
surges).

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TRMA Telecommunications Risk Management Association – A team huddle for telcos | Whats Next

Account takeover or ATO – can be a hybrid of all three previously mentioned types
of fraud, but in short it is when fraudsters illegally get access to a victim’s bank or
online e-commerce account using bots.
One thing that everyone in the room could agree on is that having multi-factor authentication is
ideal. Unfortunately, the current fraud climate requires security and finding solutions that
create as little friction as possible for the customer is always a winner. Voice and behavioral
biometrics allow carriers to do just that, bolsters customer security whilst providing a
streamlined experience for the subscriber. If you’d like to read more about Nuance biometrics
in the telecom space, please read this whitepaper, Biometrics in Telecom: Improving
Customer Authentication and Fraud Prevention, done in collaboration with Fierce Wireless.
Having the opportunity to spend time with global telcos and solutions providers was a great
experience full of learning, networking and information sharing. Looking forward to the next
TRMA event in spring 2020.

Tags: fraud, Voice Biometrics

More Information
Learn more!
Find out what Nuance biometrics is doing in the telecom space
Learn more

About Selena Castellanos

Selena Castellanos joined Nuance in March 2014 focused on
business development and marketing for Voicemail to Text and has
taken on several roles including managing a global field marketing
team in the mobile division. Recently joining the Enterprise team, she
leverages her 20+ years of telecommunications sales and marketing
experience to support the Nuance Telco Vertical as well as looking
after DragonTV from a Product Marketing perspective. Selena holds a
bachelor’s degree in Psychology and an MBA from Rollins College in
Winter Park, Florida.
View all posts by Selena Castellanos

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