Telcos fingered in Ghana simbox fraud

May 5, 2015 5:29 pm15 comments


ACCRA – MOBILE network operators in Ghana are seen as complicit in the prevalence of subscriber identity module (SIM) box fraud in the country.

Under the laws of the West African country, all SIM cards must be registered using valid identity cards before the telecommunications companies can activate them for use by any customer.

However, the trend is that most of the SIM cards being used for simbox fraud are not registered, yet active.

It remains a mystery therefore how the fraudsters manage to activate and use them.

How the fraudsters also manage to purchase SIM cards of that magnitude without being detected by the mobile companies also remains a puzzle yet to be solved.

A telecom industry expert, Amofa Baffoe, told CAJ News that although the suspicion about the involvement of the companies could not been confirmed, the fact that those arrested had in their possession significant amounts of SIM card gave credence to it.

“While it has not yet been confirmed that the companies collaborate, but the fact that those arrested have to the tune of tens of thousands of SIM cards in their possession to perpetuate the crime gives more weight to a suspicion in that direction,” said Baffoe.

MTN, Vodafone, Tigo, Airtel, and Glo Mobile are the mobile operators.

The Head, Research and Communications at the Ghana Chamber of Telecoms (GCT), Derek Laryea, however, exonerated the companies.

“The suspicion is unfounded and factually inaccurate,” Laryea said.

“To the contrary, telcos are active members of the task-force that is fighting simboxing. Telcos have been instrumental in all the simbox related arrests that have been made till date.

“It is the legitimate business of telcos to sell SIM cards, including in the thousands, to wholesalers, distributors and retailers. Telcos are not responsible for a crime committed with a SIM card by a subscriber, just as a company that sells computers is not responsible for cybercrime committed by its customer,” he argued.

Simboxing refers to the activity of routing traffic via illegal termination devices which channel national or international calls away from being terminated on mobile network operator networks and delivering them as local calls.

It was identified in the Communications Fraud Control Association’s Global Fraud Loss Survey Report, 2013, as one of the top five fraud types facing the global mobile telecommunications industry, and costs the industry over US$3 billion per year.

The Corporate Services Executive at MTN Ghana, Cynthia Lumor, revealed in a statement that MTN loses approximately GH¢34 million annually to Simboxing. Similarly, other telecom networks lost over millions of dollars to the simbox fraud.

In addition to direct financial losses, simboxing compromises cellular network infrastructure by overloading local base stations and causes customer dissatisfaction, as call quality can be degraded and subscribers who receive simbox calls are unable to identify the caller prior to answering the call, she said.

It has been reported that the government loses $40 million in revenue annually as a result of simbox fraud.

The related annual loss for the Government of Ghana would be approximately GH¢16 million for international incoming traffic that should have been terminated on MTN’s network alone, according to Lumor.

The Director of Engineering at the NCA, Henry Kanor, last month lamented that the incidence of simbox fraud was becoming a major concern for both the NCA and players in the telecommunications industry.

Between 2010 and August 2014, a total of 13 simbox fraud cases have been recorded, and17 suspects, both Ghanaians and foreign nationals, have also been arrested.

Cumulatively, a total amount of $50 million has been lost to both government and the telecom service providers, with MTN being the biggest loser.

The Minister of Communications, Dr Edward Omane Boamah, explained recently that since 2010, the NCA has been coordinating the efforts of industry players, the judiciary and the law enforcement agencies to combat this illegal termination of international traffic to Ghana.

This collaboration has led over the years to the arrest and prosecution of a number of illegal operators, he said.

Furthermore, Boamah said the NCA had instituted several measures, citing the International Incoming Traffic Verification (IITV) that has an in-built fraud-detection facility that detects the local numbers terminating the international traffic and sends this list to the telcos to block them.

He added that the Interconnect Clearing House (ICH), which is expected to take off by the middle of this year, would provide a common independent mechanism to deal with the upsurge of simbox fraud in the country.

However, the Member Parliament for Obuasi West, Kwaku Kwarteng, and the telecommunications are challenging the legality of the ICH.

They contend that NCA is creating a monopoly and that defies the law on fair competition.

Amid all that, simbox fraud is flourishing.

– CAJ News








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