FOCUS: Russian mobile operators see malware as main fraud threat for clients

By Yekaterina Yezhova

MOSCOW, Jan 25 (PRIME) -- Each year Russian mobile subscribers lose hundreds of millions of rubles from their phone accounts because of fraud, analysts calculated. Operators take comprehensive measures to abort scams through dialogue with clients and mass media campaigns with the main threat coming from malware.

“Among the most widely spread ways of fraud are writings-off of money via personal accounts and use of the mobile transfer service thanks to social engineering or an unsanctioned access to the network with data of a legitimate subscriber-victim. There is also a scam of withdrawing client money via short SMS numbers and the Trojan virus,” an expert for Hi-Tech Mail.Ru, a special project of Internet giant Mail.Ru Group, told Russian Connection.

Yulia Dorokhina, press secretary of MegaFon, one of the country’s leading mobile operators, said all kinds of fraud engage methods of social engineering, which is a psychological manipulation of people into performing actions or divulging confidential information. These are so-called ‘cons’ by third parties, use of malware and deceit with additional content services, she said.

“Hoax prizes are very popular among fraudsters. Fake messages from banks about card blocking have also expanded widely along with the penetration of banking cards. A scam with ‘incorrect’ payments, when subscribers are asked to transfer money to a certain mobile number, occurs quite frequently,” Dorokhina said.

Subscribers incur significant losses from a fraud with one-time passwords. A perpetrator calls a subscriber, who has just received an SMS with a password to enter their account, and asks for the secret information pretending they have entered the subscriber’s number by mistake. If the client gives the password, the swindler gets access to the subscriber’s mobile phone account.

A rising number of scams are committed with malicious software as smartphones have become full-fledged payment terminals. Malware steals money not only from mobile phone accounts, but also banking cards, Dorokhina said.

Counter-fraud activities

“Operators have recently registered some decrease in the volume of money stolen from mobile subscribers’ accounts thanks to their activities. They understand that a loss of money by a subscriber due to a fraud dwarfs loyalty. Meanwhile, it’s still impossible to predict all possible ways of deceit,” Hi-Tech Mail.Ru’s expert said.

Operators launch their own campaigns to fight against fraud with accounts of their subscribers, including hotlines and free antivirus soft.

“VimpelCom has been the first among domestic operators to start informing clients on all stages of using services of content-providers, and control the procedure of their activation. We also enabled our clients to open a second account to pay for content services. This option was used by almost 2 million subscribers as of the end of 2015,” Anna Aybasheva, press secretary of VimpelCom, working under the Beeline brand, told Russian Connection.

“Beeline fully compensates money written off for services of content providers rendered with violations to all its subscribers. On the whole, we can say that counter-fraud initiatives by content providers are fruitful: amounts of compensations on incorrect writings-off plunged 87% in 2015 to 6.5 million rubles, and the number of fines imposed on content providers dropped 71% to 18 units.”

In order to prevent the threats, VimpelCom informs subscribers through mass media of possible types of fraud and organizes lessons of mobile literacy in regions. “We also offer a free antivirus for our clients using Android devices,” the operator’s spokeswoman said.

Dorokhina at MegaFon said that the operator runs a whole range of activities to protect its clients: it cooperates with other operators, antivirus companies, banks and payment systems. “The antispam system helps block unwanted and fraudulent SMS mailouts with links to malware,” she said.

The operators also offer their subscribers to inform them of suspicious messages and calls. MegaFon’s clients can redirect the received spam to the operator, which will tackle the problem itself.

“All messages are accumulated and analyzed by our specialists; we take measures to prevent perpetrators’ activities. Our company pays much attention to protection from malware. We send SMS to subscribers whose mobile devices have signs of being infected. Notices are made when clients follow suspicious links,” Dorokhina said.

MegaFon detected five times more sources of malware infection in 2015 than a year earlier. “The antispam system cut the number of complaints about spam in our network by 90%,” she said.

Aybasheva at VimpelCom said the number of monthly applications of Beeline clients about mobile fraud decreased 76% in 2015, and the volume of spam fell 67%. On average, a Beeline subscriber received 0.05 SMS per month in 2015.

“Fraud with money on mobile phone accounts is not widely spread abroad, because the bulk of foreign countries use post-payment tariffs, when operators draw up bills to subscribers for consumed connection services. Nevertheless, there are cases of deceit with premium content,” Hi-Tech Mail.Ru’s expert said. Premium content is digital material downloaded for a fee, such as articles, images or audio books.

Dorokhina at MegaFon said that malicious software does not know borders. “The situation is slightly better in Europe and the U.S. thanks to people’s habit to exploit pay content and licensed programs, and care more about protection systems of their gadgets like regular upgrades of antivirus,” she said.

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