Introduction Cybercrime and cyber-fraud activities are on the rise in recent times. SIM Box fraud is just one of the ways cyber fraudsters earn qui
Cybercrime and cyber-fraud activities are on the rise in recent times. SIM Box fraud is just one of the ways cyber fraudsters earn quick money. It has become a very important area of cybercrime in the telecommunications sector in Ghana. This article touches on the nature of SIM Box fraud, how it works, its effects, and some control mechanisms in Ghana.
SIM Box Fraud and How It Works
The SIM Box fraud generally is a technical concept which is implemented to reroute or bypass international traffic channels from one country to a SIM Box device in another country. The victims are mobile users who receive calls from abroad. When someone receives a call from abroad and the recipient sees a local phone number on the phone screen, then it means that call was routed through a SIM box.
Subscriber Identity Module (SIM)-box is a device with several ports for SIM cards. The name SIM BOX was derived from an electronic device which has several ports for SIM cards. The entire box could hold between 100 to 1000 SIM cards. We use the diagram below to explain how SIM Box fraud works.
The flow of international and local call traffic
When a caller initiates a call in country A, the call is carried through the internet (also known as voice over IP- VoIP), the caller will be redirected (rerouted) through the SIM Box to the recipient in B Ghana. The call appears like a local call to the recipient in Ghana.
How the Fraudsters Make Money
SIM Box fraud is a lucrative business because the fraudsters receive the international charges for the unapproved calls. The network operator whose SIM cards were used to terminate the calls in Ghana only get paid for a local call rate because the call was rerouted through a local SIM card. Most people ask how these fraudsters get paid for their criminal activities. For instance, if a caller initiates a call in country A (in above diagram), the person pays $0.88 to the network operator in country A. The network operator keeps $0.63 and pays the international traffic carrier $0.25. The international traffic carrier keeps $0.06 and pays $0.19 to the local network operator in Ghana. The local network operator keeps $0.13 and pays $0.06 to the destination country (National Communications Authority -NCA for Ghana). If the international traffic is routed through a SIM Box, the $0.19 will go to the fraudsters who will then pay a local call rate to the network operator in Ghana.
Causes of SIM Box Fraud
Many SIM Box fraudsters have been arrested and prosecuted, but the activities are on the rise.
Besides the huge financial gain in the business, there are other two reasons for the surge and persistence of this type of fraud in Ghana. The first is the use of pre-paid SIM cards which is commonly used by the fraudsters. Their ownership and address are much harder to trace compared to the easily traceable post-paid SIMs. Secondly, the problem is prevalent in countries where the incoming international traffic rates are high. These are the identified areas which entice SIM Box operators to be firmly rooted in the business.
Impacts of SIM Box Fraud Activities
SIM Box fraud has created serious privacy challenge to the users and local government-especially where (local) governments want to know who made certain calls to whom and from where. The extent of revenue loss to SIM Box activity is so huge and it has been classified among the top 5 emerging threats to in the telecommunications industry. Cellular network operators lose about 3% of the annual revenue due to fraudulent and illegal services. Juniper Research estimated the total losses from the underground mobile network industry to be $58 billion in 2011. Ghana has experienced several SIM Box fraudulent activities since 2010 and it is estimated that Ghana has lost close to $100million.
SIM Box Fraud Control Mechanism
The NCA must sanitize the communication industry as a preventive measure to deter fraudsters from having pre-registered SIM and provision of fake personal data for registration. This, if implemented properly, may reduce the incidence of SIM Box fraud. NCA must also ensure that the network operators implement an efficient registration mechanism to commence the SIM registration as soon as possible. Additionally, the $0.19 international call and network operator’s rates are too exorbitant (attracting criminals) and must be reduced. Ghanaian network operators must reduce the rate of $0.13 to $0.06 to discourage SIM Box fraud activities.
We will continue our discussions of SIM Box fraud controls in our next article-“SIM Box Fraud Control Mechanisms”.
Author: Owusu Nyarko-Boateng, ICT Expert (Member: Institute of ICT Professionals, Ghana)
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