Gabriele Lieser

CUSTOMER SUCCESS MANAGER

Summary

When thinking about the nature of fraud, the first thought usually leads to financial fraud or another form of pecuniary deceit. Taking a closer look, evolution itself is constantly developing new and “creative” ways for living organisms to find their way through the thicket of life. Just think of the young cuckoo that pushes a strange bird couple’s brood out of its nest to be raised as the only offspring.
In human interaction, nothing beats a solid foundation of trustworthy relationships on which business activities are built. And still, similar to nature, fraudsters and liars claim their place and find new victims on a daily basis. Accordingly, in the course of history, no era is free from the practice of deception for personal benefit. Let us have a look at historic fraud cases from ancient Greece to modern times and see what we can learn from it.

The earliest known case of fraud in the western world is handed down by the Greek merchant Hegestratos in 300 BC. Hegestratos was caught by his crew trying to sink the ship in the attempt to defraud a ship insurance called „bottomry“. This insurance used the keel and the hull of a ship to secure a loan until the ship’s journey was completed. In the event that the ship sank the loan did not have to be repaid, and the entire risk lay with the insurer. The crew on the boat got wind of Hegestratos’ plan to drown them all, and Hegestratos committed suicide by jumping overboard. While this kind of loan has certainly helped many captains to make urgent repairs during long voyages, a lot of ships are undoubtedly lying at the bottom of the sea thanks to the example of Hegestratos.

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Until the late Middle Ages, only few people had access to the written word, and they took advantage of the power of knowledge. Forgeries initiated by aristocrats or church authorities were commonplace in the Middle Ages. Since older notarizations were given higher legal force than younger ones (old law broke young law), the forgeries mostly concerned older legal certificates, and therefore younger documents were also backdated. Estimates assume that in the Middle Ages there were as many forged as genuine documents, council acts, papal decrees, reliquary certificates, annals and chronicles in circulation. Forgery workshops were run for example in the monasteries of Montecassino, Italy, Corvey and Reichenau, Germany, and Le Mans, France.

Scam in the Scriptorium

A prominent example was the so-called “Donation of Constantine” which refers to a forged document dated by scientists to around 800. The Roman Emperor Constantine I. allegedly issued the document in 315/317 and granted by way of donation Pope Silvester I (314-335) and all his successors „until the end of time“, a sovereignty over Rome, Italy, the entire western half of the Roman Empire, and also the entire globe. Since the document was both spiritually and politically effective the Popes were able to establish their supremacy in Christianity and their territorial claims. The forgery was finally debunked by the humanist Lorenzo Valla in the 15th century.

Fraud in the new world

The Enlightenment (17th/18th century) was a major philosophical and scientific movement that went hand in hand with the colonization of the Americas. The expansion of the world economy increased opportunities for fraudsters as well. Sir Isaac Newton was “Master of the Royal Mint” and he systematically prosecuted counterfeiters. At that time, he caught William Challoner, a man who was renowned in the coining community for the quality of his work. He estimated his own forgery output to be around GBP £30,000 when he was hanged in 1699.

The beginnings of modern fraud

In 1920, the original snowball system, or Ponzi-scheme, was invented by Charles Ponzi who deprived investors of up to US $20 million in eight months. Another well-known scam began in 1920 when P. Crentsil sent the first “419” or advanced-fee fraud letter to a contact in today’s Ghana. The Nigerian Letter or “419“ fraud combines the threat of identity fraud with a variant of a advance-fee scheme: a letter sent or e-mailed from Nigeria offers the recipient the “opportunity” to share in a percentage of millions of dollars that the author is trying to transfer illegally out of Nigeria.
There is a great variety of scams that developed towards the end of the 1980s when technology-mitigated fraud became common. An early scam, which exposed holes in the legislation on premium phone lines, tried to convince people to call expensive premium rate numbers. Especially children were manipulated into calling premium rate numbers without the knowledge or consent of their parents through television commercials that were shown during Saturday morning cartoons.

A Surge of Activity in the 21st Century

Data breaches reached a high level of awareness in 2004 when an AOL employee took information from 92 million accounts and sold it to spammers. Stolen personal information is often used to open new accounts, take over existing accounts and steal people’s identity for financial transactions.
The current COVID-19 pandemic has created new and altered types of fraud around the world as criminals take advantage of people who feel at a loss. Via phishing attempts, emergency supplies, fake masks or medication are offered. In charity fraud, donations are collected under false initiatives, and fraudulent claims about government programs are aimed at collecting data. A certain percentage of the population will also fall for fraud attempts, even where effective digital security measures are put in place. A current example is a Lithuanian hacker who was recently convicted for having persuaded technology giants like Facebook and Google over five years to pay around $120 million in fake invoices.

How to get a step ahead

As cybersecurity threats spread to mobile networks worldwide, the professionally executed exploitation of vulnerabilities hurts right down to the marrow. According to Europol, MNOs lose €29 billion annually to telecoms fraud and the associated damage to their reputation and subscriber churn. Thanks to constant innovation, fraud detection and prevention technologies are always being improved and expanded. Identity verification uses reliable data sources to detect anomalies in identity data. Information from MNOs helps verify account holders and identify those who pose a higher risk. Multi-factor authentication methods help prove that a customer is who he or she claims to be. Companies can also analyze their data to identify fraudulent patterns.

It is a Marathon, not a Sprint

There is no way around understanding and controlling how exactly the traffic flows into and out of the network. Carefully reviewing for example roaming network configurations is one of the first steps in protecting valuable assets from attacks and preventing revenue leakage. RoamsysNext is an independent link in this chain that offers mobile operators a professional and trustworthy solution to protect their subjects.
Good and solid network quality leads to better work results, less issues and more security for subscribers which again results in satisfied and loyal business relations. RoamsysNext tools already help more than 700 MNOs across the globe; our strength is the creation of effective data management tools which include correct information and a secure, well-designed system that simplifies the user’s working life significantly. We offer easy-to-use and yet customizable applications that increase efficiency, transparency, and enhance resource management, and we continuously optimize our applications to better serve our customers. Likewise, we are increasingly keeping an eye on upgrading security aspects. Stay tuned for more advanced developments from the house of RoamsysNext.

Gabriele Lieser joined RoamsysNext in 2020 as Customer Success Manager to strengthen the bonds with our increasing number of customers and to support the marketing team. Gabriele has a strong background in corporate sales. She studied at the Universities of Trier (Germany) and Manitoba (Canada) and is incorporated in the RoamsysNext Client Service team.

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