How can the telecoms industry prevent device fraud?

Posted by Biju Nair on Jun 19, 2019 9:00:00 AM
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Preventing Device FraudLast month, I was invited to the GSMA’s Fraud and Security Group (FASG) event in Chicago. The FASG aims to drive the industry’s management of fraud and security matters, and along with raising awareness, looks to increase the protection of mobile operator technology, customer identity, security and privacy, to ensure that mobile operators remain trusted partners within the telecoms industry.

This particular event included representatives from a variety of carriers, as well as GSMA members—including HYLA Mobile. I was asked to attend the event to present information on device fraud, and how HYLA uses IMEI blacklist data and other techniques for theft and fraud prevention.

Read Blog: "Don’t Let Mobile Device Trade-In Fraud Damage Your Business"

The issue at hand and HYLA’s role

Fraud and security continue to be growing concerns for all businesses, not just telecoms operators. With fraud coming in all shapes and sizes, including identity theft, telemarketing scams, and insurance fraud, the industry has seen the global cost of fraud exceed $3 trillion.

Over the last decade, we have seen the cost of smartphones rise—today, the latest iPhone XS will set you back around $1,200. With such high value attached to new devices, it is clear how these assets can be appealing to thieves and fraudsters. And the reality is that device fraud is rife. In addition to stealing devices for its core value, fraudsters are also using data left behind on stolen or discarded devices to perpetuate fraudulent activities. According to SecuredTouch, 34% of fraud originates from trusted accounts or known devices, indicating that data left behind on these devices could be leveraged for illegal activities, not to mention the violation of privacy for consumers and enterprises.

For the end-user purchasing a second-hand device, they want to be assured that the device isn’t fraudulent. If so, it could then become disabled shortly after the purchase. With this in mind, GSMA and the FASG plays an important role within the telecoms industry, continuously assesses the global fraud and security threat landscape, analyses the associated risks for network operators and their customers, while defining and prioritizing appropriate mitigating actions.

As a provider of mobile device trade-in solutions, we play an important role in the security of devices and contribute to the FASG’s work to prevent theft and fraud. In our line of work, we receive millions of devices collected by carriers and retailers from their trade-in programs, and we have a responsibility to ensure we are not enabling stolen devices to be placed into the secondary market. When using our trade-in software and analytics; operators, retailers and OEMs are not only able to properly assess a device’s condition and trade-in value but do an automatic check of the GSMA registry of lost and stolen devices, Device Check, based on its IMEI number.

By checking devices at the point of trade-in, we’re able to identify and eliminate devices reported as lost or stolen before they enter our circular economy stream. By doing this, those accepting trade-in devices can protect their reputation by reducing the likelihood of accepting stolen or lost devices and dissuade the bad actors. Once these devices arrive at our state-of-the-art Technology and Processing Center, automated systems ensure that any and all personal contents left of these devices are wiped clean and any SIMs or SD Cards are removed and destroyed. An electronic certificate is issues against each device that has been successfully data wiped. In the event a device cannot be data wiped despite light repair work, then such devices are destroyed, and a certificate of destruction is issues against them. This further eliminates any threat customer data privacy being breached.

Having faith in the Secondary Device Market

As a result, operators, retailers and OEMs can play their part to discourage device theft and instill faith in the secondary device market, which benefits consumers and the entire device repurposing ecosystem, establishing our leadership in the enablement of circular economy

For our part, we look forward to our continual work with the GSMA and FASG to identify additional ways to help prevent fraudulent devices from entering the secondary mobile device market.

If you’re interested in improving your trade-in program and help to prevent trade-in fraud, download our white paper and learn how.

Q3 2019 Infographic

Topics: Device Trade-in Solutions

About This Blog

The HYLA Mobile blog is a place for thoughtful dialogue that will ultimately change the perception of “used” phones around the world. Visit the HYLA website to learn more.

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