April 18, 2022

The role of the Wholesaler in the fight against fraud


In the not-too-distant past, international wholesalers did little to prevent fraudulent traffic such as International Revenue Share Fraud (IRSF), Wangiri callback fraud, robocalls and traffic pumping schemes from transiting their networks. After all, the prevailing business model was “you send, you pay” and one mobile or PBX operator’s fraudulent traffic was a wholesaler’s gross profit opportunity.

This is no longer the case, as wholesalers are expected to play a positive role to identify and reduce such traffic. Failing to do so puts a carrier’s reputation at risk in an ever more competitive environment. As proof that the wholesalers are taking this role more and more seriously, a growing number have subscribed to the Global Leaders Forum’s antifraud “Code of Conduct” and use the i3 Forum’s contract language to dispute fraud and keep payments from reaching the fraudsters.

So what’s a wholesaler to do? Do what we should do best: communicate throughout the value chain! At IDT, we made the decision some years ago to actively avoid connecting with players who specialize in “premium” type termination, knowing that such companies are magnets for fraud. And we made it known that we would not tolerate such traffic. This significantly reduced the amount of fraudulent traffic coming across our network.

We also made the decision to actively support our customers in their efforts to detect and deter fraud. We monitor suspicious traffic patterns, we block risky and invalid code ranges and we vet new customers to ensure their traffic is legitimate. We do all the things that a modern carrier should do – but most importantly, we communicate with our customers and suppliers when we find something suspicious or fraudulent.

We communicate with customers so they can check the origin and validity (or, almost always, the invalidity) of the traffic if they haven’t detected it themselves. We communicate with suppliers, so they can determine who may be completing the fraudulent termination and adjust the routing before we have to pull them from our routing table entirely. We achieve this with a combination of automated and manual tools and are working to improve automation, so that the information is delivered to our partners as close to real time as possible.

There is certainly no shortage of vendors willing to offer antifraud software and solutions, and many are quite sophisticated and effective. However, wholesalers can make a big impact just by deploying the tools they use every day to monitor traffic, CDRs and operations. But it takes a change in mindset for the wholesaler.

Fighting fraud is a continuous battle, one we can never actually win – not when the bad guys spend 100% of their time finding new methods and carriers have broader businesses to run. But we can protect our customers and lose less as an industry by aligning the thinking in our companies to view fraudulent traffic as something to be deterred and thwarted, whenever we find it. Then we have to share information in a timely way.

We all have a role to play in the fight against fraud and IDT global takes its role seriously. We hope you will join us in the fight.  

Anthony Davidson

Executive Vice President – Carrier Operations

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