SIM box fraud costs telecom sector $3 billion. Here's what it is

As technology evolves and advances, scammers continue to discover ways to cheat people out of money. One latest scam that is duping telecom companies out of billions of dollars is the SIM box fraud. In this, international numbers pretend to be local, thereby robbing telecom operators of hefty international call fees. As per Communications Fraud Control Association's 'Fraud Loss Survey' report for 2021, globally the SIM box fraud has cost the telecom industry around $3.11 billion, or approximately 7.8 per cent of the industry's total revenue. During the past few years, it has actually emerged as one of the top telecom scams.

How does it work?

This is a bypass fraud. Scammers use Sim Boxes to redirect international calls over the internet and make them look like local calls.

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As per Infosys, "a SIM box fraud diverts international calls to a cellular device through the internet. This device, called a SIM box, routes the connections back into the network as local calls, using hundreds of low-cost or even unpaid SIM cards, which are often obtained with forged identities."

They thus benefit by exploiting the "difference between local and international charges by paying just local rates or none at all to cell carriers after billing international rates from the source."

While the caller still pays the higher international call rates, the middleman gets away with paying the local rates and the local telecom operator suffers revenue loss.

Additionally, the end users get affected by poor service quality, which also reflects badly on the telecom operator. Infosys warns that these frauds can also become a threat to national security as they can bypass legal intercepts which monitor criminal activity.

(With inputs from agencies)

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