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Unauthorised transactions, billing plague SA mobile consumers

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Ilonka Badenhorst, GM of the Wireless Application Service Providers' Association.
Ilonka Badenhorst, GM of the Wireless Application Service Providers' Association.

As South Africa’s mobile ecosystem evolves, more control measures and strict regulations are needed to protect consumers from mobile fraud.

This is according to Ilonka Badenhorst, Wireless Application Service Providers’ Association (WASPA) general manager, commenting on how communications fraud is increasingly becoming big business.

In its 2019 Global Telecom Fraud Survey, the Communications Fraud Control Association reveals fraud losses increased by 37%, with a financial implication of R469 billion.

Meanwhile, recent research from Paris-based anti-fraud firm Evina found in the month of July, one out of every three wireless application service provider subscription attempts in SA was fraudulent, noting that local mobile phone users are very often subscribed to mobile services without their consent.

Furthermore, some of SA’s telcos have noted a rise in mobile fraud on their networks since the onset of lockdown.

Badenhorst points out that SA’s smartphone penetration has surpassed the 90% mark, as indicated in the Independent Communications Authority of SA’s State of the ICT Sector report.

This is the result of new, cheaper handsets that are more readily available, more content and subscription services entering the market and more mobile payment mechanisms; therefore, closing the connectivity gap.

However, this growth also creates a new playground for criminals and fraudulent activity, and the erosion of trust continues to increase, says Badenhorst. “Missing data, unauthorised payments, illicit spam and intrusive mobile marketing and ad fraud continue to plague the industry and are subsequently changing the fraud game.

“In fact, mobile fraud is big business and as long as there's money to be had, there will be fraud, which is why control and strict regulations are needed to protect consumers from unscrupulous actions from parties.”

In terms of how much local consumers lose on mobile services fraud, Badenhorst says it’s difficult to quantify because the statistics and data change quite regularly.

However, during 2019, more than R200 million was lost due to SIM swap fraud alone, she states.

Tips and tricks

The WASPA GM says some common mobile fraud incidents that consumers currently face include unauthorised transactions and unauthorised billing, which is facilitated by click-jacking or malware application fraud.

“It is very unfortunate that the global mobile value-added service industry is a target for third parties facilitating unauthorised transactions, with the digital world a breeding ground for fraudulent activity. This phenomenon is affecting stakeholders across the board, as well as negatively impacting consumers who are the victims of such illegal actions.

“As such, it is critical to always read before you respond to any prompts and ensure that you are clicking in the correct boxes before you give consent and provide apps with any permission. Regularly check your statements and banking transactions.”

However, not all is lost, notes Badenhorst, indicating there are security measures that mobile operators can incorporate to protect consumers.

The first, she advises, is education. “Mobile network operators play a crucial role in reminding consumers to be aware and vigilant and encourage safe behaviours and good practices. They also need to take proactive steps to protect consumers’ privacy interests and enable them to make informed choices about what data is collected and how their personal data is being used.”

Secondly, all WASPs should be bound by the WASPA Code of Conduct, she says. “This code requires all members to meet certain standards in terms of privacy, consumer protection, spam and protection of minors. Membership of WASPA indicates to your customers that your company takes these issues seriously.”

On the third measure, the GM says it’s important that operators take necessary steps to protect their infrastructure to ensure the underlying framework is secure and reliable.

Lastly, other industry ecosystem players such as device manufacturers and mobile service providers have a role to play and need to work collaboratively to deliver solutions that build confidence.

“The good news is that industry players continuously endeavour to secure our systems and to stay ahead of any potential threats, to ensure consumers can make use of mobile services with confidence. These measures have a very high success rate and block a great deal of attempted fraudulent attacks. Unfortunately, nothing is fool-proof and on occasions the attempts lead to actual fraudulent and illegal activity,” she states.

Consumers can also report a scam, unwanted billing or lodge a complaint on the WASPA Web site.

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