> Losses Are on the Rise as Faceless Fraudsters Make Their Mark
> September 7, 1999 - In 1998, cellular/PCS carriers lost a total of
> $33.4 million to fraud in the United States alone.
Errr ... a "half million dollars daily" would be more like $186 million/year
Quote:> [TELECOM Digest Editor's Note: Yeah, and you know something else?
> The last time a hacker broke into the Acme Universal Corporation's
> web site, it cost them about a million dollars to repair the damage.
> I know its true because they issued a press release about it when
> it happened, and the newspapers would not have any reason to lie
> about something like that. I don't think the cellular industry would
> have any reason to lie either, and am sure all the figures they
> present in their report have been carefully audited. PAT]
Far be it from me to defend a telephone company, but keep in mind
there are two ways of listing the expenses involved in a fraud
incident. Kind of similar to, dare I use the example, the "price" of
the * seized and then displayed in those all too familiar
television news conferences where the local gendarmes show the bricks
of * ... Note that they will always cite the "street value"
rather than the much less notable, for want of a better term,
In the case of the telcos, there's the choice between listing their
own cost of providing that service (a pretty small number), or the
much more impressive figure based on how much they'd have billed. And
naturally, they, too, at least in press releases, use the latter.
However, if you look around closely enough, you can find other venues,
such as SEC mandated filings, where the telcos use the (to me, at
least) more appropriate lower figure.
For example, on p. 16 of Omnipoint's 1998 annual report, they state
"Included ... for 1998 was approximately $9.6 million of costs
associated primarily with international fraud committed during the
first six months of 1998."
Notice their use of the word "costs". Presumably this was real money
Omni had to pay out to the international carriers/foreign telcos (and,
no doubt, a similar but smaller amount to USA landline carriers) to
complete the calls.
disclaimer: I'm not only an Omnipoint customer, I'm also a shareholder
Knowledge may be power, but communications is the key
[to foil spammers, my address has been double rot-13 encoded]