Deconstructing sim Box fraud

Features Feb - 03 - 2015 , 02:52

It may look strange to many people when they receive a call from a local number and it is a call from someone outside of Ghana.

This happens because the call coming from abroad (another country) is handed over to the recipient’s number by another local number from an illegal Subscriber Identification Module (SIM Box) operated here in Ghana.

These SIM Boxes bypass the licensed and approved telecommunication gateways to hand over to the recipient’s number using the Internet. SIM Boxes use Voice over Internet Protocol (VoIP) technology which is used in applications such as Viber, Skype, WeChat, Line, Facebook Messenger and many others. This happens with the voice service delivery of the telecom industry.

Every year, Ghana loses about $40 million to this illegal activity of SIM Box fraudsters. The telecom companies also lose a lot of revenues every year to this increasing crime.

There are several causes to this persistent problem bedeviling one of the fastest-growing sectors contributing hugely to Ghana’s Gross Domestic Product.

Preventing SIM Box fraud

Dilemma of the arbitrage: The huge difference between the International Call Rate and the Local Call Rate has created a profitable market place for the fraudster to by Red AdBlocker" href="#">make good money as a return on their investments. The telecom companies believe that the rate of growth of SIM Boxing in Ghana is the result of this huge amount between International Call Rate ($0.19 per minute) and Local Call Rate ($0.03 per minute). They believe a reduction in the difference will discourage the fraudster from engaging in this illegal business.

But NCA, as the regulator, also thinks otherwise. They think irrespective of the amount of the call rate difference, SIM Box fraudsters will always ply their trade. Obviously, creating a gap of profit for the fraudsters to deem it a trade of bountiful returns is the evil head that must be cut off by all the parties that are losing revenues.

The slimmer the profit gap the smaller the market space for the SIM Box fraudsters to survive profitably. It is salient to note that in countries such as Nigeria and South Africa where this rate gap is negligible ($US0.04 and US$0.00 respectively), SIM Box fraud is non-existent.

SIM box fraudsters and cohorts: This illegal business is only possible locally because of their international partnerships from the countries where the calls originate from.

In curbing this problem, it is best to be able to investigate the call-source parties so they will not be able to terminate the calls via the Internet. It is necessary that the government, the NCA and the telecom partner with their industry players in those countries in order to ensure that calls are terminated through the approved gateways. Resolving the issue from the source will also discourage the perpetrators from engaging in this illegal business.

SIM Box Importation: The ports of entries are preventive gateways the government can use to reduce or discourage people from engaging in SIM Box fraud. The SIM Boxes are imported as computer devices into the country. These devices must be duly registered and more information with regard to the importer, their line of businesses and purposes of importation must be clearly profiled. And it must not end there. Security agencies must ensure that these devices are not used for SIM Box fraud but are used for the approved services.

Every telecom device is supposed to be certified by the National Communication Authority (NCA). It is therefore within the power of the regulator to work with the security agencies to make sure that these devices are imported by identifiable entities for the approved uses and not for SIM Box fraud.

SIM card registration and purchase: SIM cards are the life of the boxes. According to legislation, these cards must be registered by the users using approved identification documents. It is surprising that these fraudsters are able to acquire up to three thousand (3,000) SIM cards to run their boxes to terminate these international calls as local ones.

How is it possible that these fraudsters are able to purchase these cards from retailers for their operations? There is a big loophole in the registration process which must be sealed.

Anyone who acquires a number of cards must be investigated or monitored so they handle these cards for their approved uses. Dr Edward Omane-Boamah, the Minister for Communication, has suggested that people would be limited to register up to 10 SIM cards.

It sounds plausible. But the registration process must be critically monitored so these fraudsters find it difficult to acquire these cards for the SIM Boxes. Registration systems must have security tiers so names that have a certain number of cards registered to them will be checked with the numbers used to terminate the international calls.

Mr Eyome Ackah, an industry professional, believes that Ghana needs a centralised database for all registrations hosted by NCA.

This will reduce the porous nature of the existing registration process so that “every registration is recorded in that database so if a single ID Card is registering multiple numbers, this should be detected easily”.

Reporting the numbers: One of the solutions that the telecom companies in Ghana have come up with is for their customers to join the fight against SIM Box Fraud by reporting those numbers used to hand over the international calls.

Customers who receive international calls on local numbers are entreated to report it by texting “SIMBOX” to Short Code 419. Reported numbers are given to the respective telecom companies for deactivation.

Whenever a report is made of any SIM card number being used as a terminating point for international calls the respective telecom company deactivates the number so it cannot be used to terminate subsequent calls. This implies that their investments in acquiring the numbers and producing the SIM cards have gone waste.

Sophistication of SIM Boxes: One of the problems the telecom companies and the security agencies face in tracking down the fraudsters is that they are becoming sophisticated and using more advanced systems and servers.

Hitherto, they were tracked by the signal poles they mount on rooftops for their devices.

Now, they use systems that can receive signals indoors making their monitoring and tracking difficult.

Technology expertise of security agents: The security agents who work in partnership with the telecom companies and NCA must be trained to know how these gadgets get into the country, the companies and entities who import them, how they function and how they can be tracked. The government and the regulator must invest in acquiring the technology and skill sets for the security agencies to do their work effectively.

Special law court: It has been suggested by some industry experts to have special courts for telecommunication crimes, especially the SIM Box frauds and other related crimes. This will facilitate the prosecution of the perpetrators to deter others from engaging in the crime. Since the telecom industry is one of the fastest growing services industry in Ghana, a special law court to salvage it from revenue loss is a call in the right direction.

Revenue loss: At the end of the day, the government and the telecom companies lose millions in revenue from SIM Box fraud. The government feels less of the pain because the telecoms are made to pay for the calls terminated on their numbers.

The telecom companies lose revenues because the international calls are terminated at local call rates, they have to pay for the calls terminated on their numbers, deactivate SIM cards they have invested in producing, and also compete with fraudsters who do not have licences to operate but use their platforms.

SIM Box: A technology disruption or obstruction?

Some technology activists and experts also believe that VoIP technology which is being used by Line, WeChat, Skype, Tango, Viber, Facebook Messenger and other applications is the future and will soon replace the traditional voice termination platforms the use of the telecoms. But should they be used illegally to terminate voice calls? No! The National Communication Authority must collaborate with the telecom companies to ‘kill’ this illegal business and save the industry and the huge investment the telecoms have made in Ghana. GB

Technology Consultant, Digital Marketing Strategist, Social Media Expert and Trainer.

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