Clearer understanding of meaning of fraud and misuse will help regulators combat telecoms scams, says EU body

The Body of European Regulators of Electronic Communications (BEREC) has sought to provide examples of the kind of activities that constitute 'fraud' or 'misuse' of phone numbers. It said because the two terms have not been defined under EU legislation, telecoms regulators have not been adopting a consistent approach to tackling the problem.

Under EU law the consumers are generally required to be given access to "all numbers included in the national numbering plans of other Member States and to access services using non-geographic numbers within the Community, including, among others, freephone and premium rate numbers".

Under the EU's Universal Services Directive, however, telecoms regulators have the power to "require undertakings providing public communications networks and/or publicly available electronic communications services to block, on a case-by-case basis, access to numbers or services where this is justified by reasons of fraud or misuse and to require that in such cases providers of electronic communications services withhold relevant interconnection or other services revenues".

BEREC, which is a body that is made up of representatives from each of the national telecoms regulators in the 27 EU countries, including Ofcom in the UK, has proposed a new "process" which it wants regulators to follow in order to share information about fraud or misuse of phone numbers as well as when they choose to engage in any enforcement action.

BEREC said a clearer understanding of what is meant by terms 'fraud' and 'misuse' under the Universal Services Directive is important because it would help the EU regulators to more consistently engage with the proposed enforcement and information sharing process.

"Different countries use different definitions for each of these concepts, and this complicates European application of this measure," it said in a consultation paper. (49-page / 720KB PDF)

If numbers are used in order to provide consumer services but are "not included in the national numbering plan of the relevant jurisdiction", then operators and regulators should consider such a practice to be 'fraud or misuse', BEREC said. If numbers are used without the consent of those that allocate them then this too is an activity which could merit blocking or withholding of revenue, it added.

BEREC also said that phone hijacking, where numbers allocated to others are used by third parties without consent being given, also constitutes fraud or misuse of numbers, as is using numbers to provide services and not transparently detailing tariff rates or prices, it added.

Those that artificially inflate calls traffic by generating extra calls or prolonging existing ones for their benefit or for the benefit of those operating or hosting telecoms services, can also be said to be misusing or fraudulently using numbers, BEREC said. It said artificial inflation could also be said to have occurred if "a calling pattern" is established that is simply "disproportionate to the overall amount, duration and/or extent of calls which would be expected from a good faith usage; or an acceptable and reasonable commercial practice relating to the operation of telecommunication systems".

The body said that hackers have modified software in order to force people into dialling premium rate numbers, whilst other scams have been specifically designed to "encourage consumers to call or text back" to international premium rates. In addition, consumers can often be unaware of calls or texts that scammers generate from their phone which BEREC said can stem from malware or particular smartphone applications, among other means.

BEREC added that operators often face instances where electronic service providers have given false information "in the subscription or provision" of those services, and that they also regularly deal with "identify theft" concerning consumers. Those practices are to be considered fraud or misuse of numbers, it said.

BEREC said that fraud and misuse stemming from the requirement of "open access" to phone numbers can cause problems for consumers, including increased costs from raised tariffs and a reduction in the number of services they can choose from.

If particular sets of numbers become associated with fraud or misuse then "legitimate and innovative services" provided via numbers from the same range could lose out, particularly if, "in the extreme", regulators elect to close an entire "numbering range" to combat the problem, it said. In addition BEREC said that regulatory bodies across the EU need to cooperate to block services and numbers in order for the "overall quality of services" on offer not to be negatively impacted on.

BEREC said that regulators can use their powers to prevent fraudulent calls from originating or in withholding revenues with the purpose of reducing the "financial exposure" of consumers and operators from those calls already made.

"Preventing benefit from misuse or fraudulent behaviour should have the effect of reducing fraud or misuse and therefore further protecting consumers and operators," it said. "Such a process between [regulators] will also have a positive outcome on operators, which have to dedicate increasing resources to detecting/preventing fraud situations."

"It should be noted that the BEREC process recognises that the decision as to whether to intervene is a matter for the relevant authority in the country concerned," BEREC said. "Nonetheless even if intervention at a national level is not undertaken, there remains an expectation of cooperation in respect of information sharing."