Fraud Risks

• Subscription Fraud
  • Fraudulent accounts created using stolen identities or payment information.
• Account Takeover
  • Unauthorized access to customer accounts to make purchases or changes.
• Payment Fraud
  • Use of stolen credit cards or bank information for payments.
• Friendly Fraud
  • Legitimate customers disputing charges to avoid payment.

Regulatory Challenges

• PCI DSS Compliance
  • Adherence to data security standards for handling payment information.
• Telecommunications Regulations
  • Compliance with laws governing communication services and customer privacy.
• Data Protection Laws
  • Adherence to GDPR, CCPA, and other privacy regulations.
• Billing Transparency
  • Requirements for clear billing statements and disclosures.

Chargeback Triggers

• Unauthorized Charges
  • Customers disputing charges they do not recognize.
• Service Quality Issues
  • Complaints about poor connectivity, dropped calls, or slow internet speeds.
• Billing Errors
  • Incorrect charges due to system errors or misapplied fees.
• Contractual Disputes
  • Disagreements over early termination fees or contract terms.
• Non-Delivery of Services
  • Failure to provide promised services or features.

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• Multiple Account Registrations
  • Numerous accounts created with the same payment information.
• Mismatch in Customer Data
  • Discrepancies between billing information and account holder details.
• High Usage Patterns
  • Unusually high data or call usage shortly after account activation.
• International Transactions
  • Payments from high-risk countries or regions not typical for the business.
• Repeated Payment Failures
  • Multiple declined transactions before a successful payment.
• Rapid Chargebacks
  • Chargebacks filed shortly after transactions, indicating potential fraud.

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Business Verification

• Confirm valid telecommunications licenses and regulatory approvals.
• Verify physical business locations and contact information.
• Check for compliance with industry-specific regulations.

Financial Assessment

• Review financial statements to evaluate revenue stability and profitability.
• Analyze average transaction amounts and monthly processing volumes.
• Assess the impact of subscription models on cash flow.

Risk Evaluation

• Examine historical chargeback ratios and reasons.
• Assess fraud prevention measures and security protocols.
• Review customer service practices for handling disputes and complaints.

Policy Review

• Ensure clear terms of service and billing policies are in place.
• Verify that cancellation and refund policies are transparent and accessible.
• Evaluate data protection and privacy policies for compliance.

Reputation Analysis

• Check online reviews and ratings on platforms like the Better Business Bureau.
• Investigate any history of regulatory violations or legal issues.
• Assess customer satisfaction levels and complaint resolution effectiveness.

Technology Assessment

• Confirm the use of secure, up-to-date billing systems.
• Ensure encryption and tokenization are implemented for data protection.
• Verify compliance with PCI DSS and other security standards.

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Sudden Increase in Chargebacks

• A telecommunications provider experiences a spike in chargebacks due to billing errors after a system update.

High Number of New Accounts from One IP Address

• Multiple accounts created from the same IP, indicating potential fraud.

Unauthorized International Calls

• Accounts show unexpected international call charges, suggesting account takeover.

Rapid Cancellation Requests

• New customers quickly cancel services after initial high usage, possibly indicating fraudulent activity.

Disputes Over Early Termination Fees

• Frequent chargebacks related to contract cancellations and associated fees.

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Business Operations

• What types of telecommunication services do you offer (e.g., mobile, internet, VoIP)?
• How long have you been operating in the telecommunications industry?
• Do you serve residential customers, businesses, or both?

Billing and Payment Practices

• What is the breakdown of one-time charges versus recurring billing?
• How do you handle billing disputes and customer complaints?
• What payment methods do you accept?

Fraud Prevention Measures

• What security protocols are in place to prevent subscription fraud and account takeovers?
• Do you utilize any fraud detection tools or services?

Regulatory Compliance

• Are you compliant with PCI DSS and data protection regulations?
• How do you ensure compliance with telecommunications laws and regulations?

Customer Service

• What channels do you provide for customer support?
• What is your average response time for resolving issues?

Technology and Infrastructure

• Do you have secure systems for handling customer data and payment information?
• How often do you update and audit your security measures?

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Transaction Monitoring

• Implement real-time alerts for suspicious activities.
• Regularly review transaction reports for anomalies or patterns indicative of fraud.

Chargeback Management

• Analyze chargeback trends and implement corrective measures.
• Maintain documentation to dispute illegitimate chargebacks effectively.

Compliance Checks

• Ensure continuous adherence to PCI DSS and telecommunications regulations.
• Stay updated on changes in regulatory standards and implement necessary adjustments.

Customer Feedback Analysis

• Monitor reviews and social media mentions for service issues.
• Address negative feedback promptly to improve customer satisfaction.

Security Updates

• Keep systems and software up to date with security patches.
• Implement advanced security features like encryption, tokenization, and multi-factor authentication.

Merchant Communication

• Maintain open dialogue regarding changes in business operations.
• Provide resources and support for fraud prevention and compliance.

Risk Assessment Adjustments

• Reevaluate risk parameters based on changes in transaction volumes or patterns.
• Update underwriting policies as necessary to reflect current risks.

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