The Worrying Rise Of Telecom Fraud In Africa

Fraud in the telecommunications industry is a problem that is developing in Africa and its widely known across the continent. Telecoms fraud has a wide-range definition that covers the deliberate abuse of telecoms networks to illicitly obtain money from a telecoms operator, or its customers. The telecoms network itself is the attack surface on which these fraudulent activities are played out.

The main players in the Telecoms industry in Africa are well aware of the security threat that exists in the industry as is happening in other industries as well. According to the Africa Telecommunications Market Overview by Medium, Africa’s young population has fuelled its Telecommunication industry to change rapidly with the market worth of about $63.17 billion in 2024. Medium further projects the industry to grow and reach more than $82.34 billion by 2029.

This projected growth, however, is dependent on various factors brought about by technological advancements like Artificial Intelligence (AI), Machine Learning (ML), and Big Data. As technology advances and new digital transformation centred technologies come in, then the risk factor also becomes alarming. When everyone who is in the digital space buys into these new technologies, then the attack surface continues to increase and individuals as well as companies and organizations of all sizes become more vulnerable.

Telecoms fraud in Africa

We recently spoke with Gavin Stewart, Vice President for Sales at telecom software provider Oculeus, about the unique conditions in Africa that are fuelling Telecoms fraud.

“Telecoms fraud is growing everywhere – but Africa has its own special conditions that leave it more exposed to the growing fraud threat,” said Stewart.

Telecoms fraud is growing everywhere but the conditions in Africa leave the continent even more exposed to the growing fraud threat. Termination rates to African countries are amongst the highest in the world with the cost differential between international and national calls is frequently quite dramatic. fraudsters commonly apply a manipulation so that international traffic masquerades as local/national calls, and therefore get the cheaper rates.

Africa also attracts numerous petty fraud use cases which seek to quietly drain a subscriber of credit, especially with the continent’s high reliance on the prepaid subscriber model. A classic example would be the ‘VAS double opt-in’ fraud. The fraudster provides chargeable services (for instance sports updates) even though no consent has been given by the subscriber; by the time the subscriber notices, their credit is already gone.

Forex instability in the country also fuels fraudulent activity as the ability to pay for services in local currency whilst receiving revenues in foreign currency can be an extreme sport. There is no profit as such generated with the exchange of local to foreign currency being its own reward.

Africa has also been a global pioneer in Mobile Money transactions which equally attracts new and complex fraud use cases. Whereas the traditional banking sector benefits from multiple security layers and controls, a Mobile Money fraudster needs only access a mobile network in order to appropriate funds.

Telecoms Fraud and Artificial Intelligence

Stewart looks at AI as a tool that has strengthened the ability of both fraudsters to operate effectively and telecoms operators to better prevent fraud on their networks.

“At one level, AI allows them (the fraudsters) to outwit traditional anti-fraud systems which rely on spotting suspicious patterns of activity. The AI element allows fraudsters to disguise these patterns and escape detection. Furthermore, fraudsters now employ AI to more convincingly masquerade as trusted parties like banks, authorities, or a relative, including advanced techniques such as voice and visual mimicry,” Stewart said.

Working at Oculeus, a software vendor focused on telecoms operators and carriers, Stewart suggests that using the same technologies that the fraudsters are using can help in curbing telecoms fraud in Africa. He believes that AI can automate the early detection of emerging new fraudulent patterns and fortify defences.

“Without AI in place, then we would need to allow time for attacks ‘mature’ to the point where they form a pattern recognizable to either a human, or a traditional rules-based anti-fraud system. Often, it would be too late by then. So, AI excels at detecting fraud events which otherwise could be missed, to which it can then automatically assign a risk-level, which in turn defines whether this is a threat likely to require blocking,” he said.

Stewart further advised telecoms companies on how they can prevent fraud before it happens saying, “In many fraud scenarios, the fraudsters will ‘test’ the connection in advance to assess network vulnerability. In itself, this very activity leaves a fingerprint which a sophisticated anti-fraud solution will detect.”

Stewart noted that the future of telecoms fraud prevention is to “fight fire with fire” and employ the same advanced techniques also used by fraudsters.

“Since fraudsters are manipulating SIP (Session Initiation Protocol) protocols, it follows that SIP level real-time protection is vital. It is incumbent on telcos to implement AI-based technologies if they are to have any hope of successfully detecting and mitigating AI-driven frauds today. I believe we will see an exponential rise in the sophistication of frauds driven by social engineering,” he remarked.