AUSTRALIA (ZDNet Australia) - This convenience, however, is shaping up as a major cause of revenue loss to carriers, with Australia racking up over AU$100 million in GSM fraud losses each year.
"Fraud is a global problem and GSM (global system for mobile communications) is a global system - Australia is not immune from the effects of this global fraud," PricewaterhouseCoopers' associate director of telecoms fraud, Peter Coleman, said at the now2001 conference in Sydney.
Australia's subscribed (pre-paid) mobile handset environment means stolen handsets are one of the main mobile phone scams going, according to Coleman.
"The subscription that carriers put on handsets is enormous," he said.
"I estimate that the average fraud phone in Australia profits between AU$1500 and AU$3000 a day before it is cut off. This is still a fairly significant revenue loss for carriers."
Other types of mobile phone fraud include stealing connectivity, evasion of debt by debiting it to another account and maintaining zero-rated bills.
"Carriers are very reluctant to talk about fraud," Coleman said.However, fraud of this kind is not high-tech and the best solutions to combat it are simple, cost effective techniques.
"It's not rocket science, it's not high tech - it's very low tech."
Coleman suggests that some measures can be carried through before a mobile phone subscriber's service is activated.
For example, he suggests many telecoms carriers' subscriber verification processes are simply not up to scratch.
"Carriers must demand to know who the customer is," he said.
This would mean stepping up the amount of identification required and installing a data matching system for staff to cross-check customer details with other utility providers.
"Bill Gates is probably the greatest fraudster to hit cellular phone services in the US," Coleman said, pointing to the fact that people are getting away with using any name and fraudulent identification to sign up for services.
And because more than 70 percent of fraud committed on carriers is by those who work for them employee-screening policies should be enhanced, Coleman suggested.
"[Carriers] should also know who their employees are."
Once a subscriber has an activated mobile account, carriers that have an automated fraud analysis service installed will be given an investigative picture of what is happening on its network - highlighting potential scams.
Many carriers don't have fraud systems installed because it's expensive and doesn't manifest a profit, whereas carriers without a fraud system in place are losing between 10 and 30 percent of revenue a day, Coleman said.
According to Coleman, GSM scammers are committing fraud because "they can", and it's up to Australian carriers to step up procedures to stamp it out.