Telecoms
Rapid advances in technology and the launch of new operating systems, applications, designs and upgrades make the mobile phone industry one of the most competitive in the UK. This continual push for market share, through constant innovation, has turned the mobile phone into one of the must have fashion accessories or business tools. In their attempts to always own the latest generation of handsets, a growing percentage of consumers have turned to first party fraudulent behaviour, from falsifying insurance claims to entering into monthly contracts with no intention of paying.
Fraudulent insurance claims
The latest indications from mobile phone insurance providers suggests that 5% of mobile phone users would make a fraudulent insurance claim in order to own the latest handset. These numbers are substantiated by when you consider the instances of 'lost' phones that correspond with new handset launches. Between May and June 2009, around the time when the iphone 3GS was announced, the number of handsets reported missing rose by 11%. Other reports suggest that iphone related claims jump by as much as 50% whenever a new model is released. After all, increasingly lengthy contracts that tie the consumer in can be seen as quite a burden for those wishing to be seen with the latest generation of handsets. Fraudscreen solutions, as in the motor, travel and home insurance sectors, will predict those consumers who are more likely to make frequent and fraudulent claims.
Contract payment defaults
Because first party fraudsters will ‘work the system’ for their own financial gain, they have little or no intent to honour financial commitments they agree to. Monthly contracts offer these consumers the chance to own the latest handsets without a large upfront cost, before deliberately avoiding payments until the contract is cancelled and then failing to return the handset. The losses impact operators and resellers alike.
For operators: Integrate cipher:risk into your risk management systems to predict likelihood of continued payment. Use cipher:collections to improve the effectiveness and efficiencies of your collections activity by segmenting your collections and recoveries data according to payment intent.
For resellers: Use cipher:risk to reduce bad debt levels associated with lost, operator subsidised, handsets.
