Mobile operators warned over 3G fraud risk

date: 25th January 2001, source: Total Telecom

Mobile telecommunications operators should take steps to prepare themselves for an unprecedented level of fraud once third-generation handsets are available, and even for the possibility of being held liable for m-commerce scams.

This was the warning given by a fraud management company at an international conference on telecommunications crime Tuesday.

Tania Taylor, product marketing manager for Alcatel Telecom Ltd., told Crime 2001 that the situation enjoyed by Internet service providers - which are rarely held liable for online crime, with retailers picking up the cost of cons such as card-not-present fraud - was unlikely to apply for telcos operating m-commerce services via 3G mobiles.

She said: "Who's liable, if tickets are bought fraudulently from a football club? Is it the operator or the club?"

Later, speaking to Total Telecom, she said that the likelihood was that telcos would have to pay if their phones offered users the chance to order tickets from a particular vendor, as they could expect that operators had screened their subscribers in advance.

The other problem is the potential scale of frauds. At present, criminals make big money by selling voice calls, diverted remotely from a switchboard to an international number. However, in the hands of a thief or fraudulent subscriber using a fake credit card number, the ability to use 3G phones to order washing machines, dish washers, music systems or other high-value electronic goods means that opportunities to make money are multiplied. For telcos the threat is clear: "You could lose an absolute fortune," she said.

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