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SIM Box Fraud: GOVT. LOSES $150MILLION YEARLY

Have you ever received an international call, whose quality was very poor, a lot of delays, and most importantly, the number calling you appeared as a local call instead of the international format? Well, you might as well being a victim of SIM box Fraud.

Reports show that mobile operators and governments are losing up to 150 million US dollars every year to Fraudsters who illegally terminate international calls as local calls. This is the new headache that mobile operators are now facing, something that might down the mobile industry’s developments in Africa.

In an interview with an official of the National Telecommunication Commission (NATCOM), he gave the figures and effects that this practice has on the industry. ‘SIM box’ fraud takes place when individuals or organisations buy thousands of SIM cards offering free or low cost calls to mobile numbers. The SIM cards are then used to channel national or international calls away from mobile network operators and deliver them as local calls, costing operators revenues.

“As mobile operators, we have paid for licenses, invested in the network infrastructure, and we pay taxes. On the other hand, these fraudsters have not incurred any of these expenses, and therefore, can afford the luxury of offering as low as 0.037 US cents per minute, to terminate calls to our local networks.” A worker at Airtel remarked.

Two years back the Kenyan government and operators lost 12 to 15 million minutes worth of revenue to this SIM box fraud. This is approximately US$440,000 per month. In Ghana, the situation is not any better. Their government reported SIM box fraud has cost them US$5.8 million in stolen taxes alone.

“All they (Fraudsters) need is a SIM box that can store up to 800 SIM cards, target networks offering cheapest rates and free offers, and a small office in town, to offer these services.” Mr.  Koroma added.

The operators are forced to incur unnecessary expenses in buying software, software licenses, and basically, purchasing a whole application to detect and block those illegal call terminations. They are also forced to employ additional dedicated staff to deal with this malpractice.” Koroma responded.

This is also costing operators a lot of money to block SIM cards detected carrying out the scam. “The cost of producing one SIM card is quite high, and if this SIM card is not used in generating revenue for the business, then the company incurs a lot of loses.”

Koroma went on to explain that  government can help by making it mandatory for operators to have equipment to detect this fraud, and also back it up by arresting the offenders and making sure that they are penalized for their malpractice, as a deterrent to others.

So, is there something that Africa can learn from the US and the rest of the world. Several private companies have identified this problem, and have stepped in to offer SIM box fraud tracking services to mobile operators. An example of such a company in the US is Sevis Systems. Mobile companies in America therefore, do not need to incur expenses in active monitoring of SIM fraud, but simply pay a subscription fee to such services, rather than waiting on the government to deal with the problem. Recently, Airtel Ghana announced the introduction of short code, 919, that customers can use to report SIM card fraud. This is an indication that the crime is now becoming rampant and most operators are now working together in concerted efforts to stamp out the problem.

In Sierra Leone Sim card fraud has generated high interest among fraudsters and is generating huge illegal funds for them, causing great financial loss to government and mobile companies. Spokesman for the NRA has disclosed that the government tax office is not benefitting anything from the scam, which is a big disadvantage to the economy.

Just few days back Police swooped on a number of Sim box fraudsters at a very prominent hotel at Aberdeen located by the Sea side. Sources say the Company that was engaged in the Sim box is a Company owned by a Sudanese-America National called Adel Sulaiman. Mr. Sulaiman is reportedly, according to Police investigation the illegal operation has been in existence for quite some time without the Police or Security agency getting a glimpse of it, but with the prompt action and strategies deployed they were able to apprehend some senior officials of the Company who are now helping police in the investigation.

WHAT IS SIM BOX FRAUD?

A SIM box fraud is a setup in which fraudsters install SIM boxes with multiple low-cost prepaid SIM cards. The fraudster can terminate international calls through local phone numbers in the respective country to make it appear as if the call is a local call.

“One prosecution not good enough” – Sakyi Addo

 

The CEO of the Ghana Chamber of Telecommunications, Kwaku Sakyi Addo has said that those found guilty of SIM box fraud must be prosecuted to deter others from engaging in the act.According to Sakyi Addo, arresting SIM box fraudsters is commendable but prosecuting them would make it unattractive for others who wish to venture in the illegal activity. His comments come after yesterday’s frontpage publication of this medium in which officials from a local Company called Afcom are being investigated for an alleged offence of Sim box fraud. It could be recalled that a former President of the Ghana Real Estate Developers Association, (GREDA), Dr. Alexander Tweneboah, was arrested for sponsoring the activities of SIM box fraudsters. Dr. Tweneboah allegedly confessed to have committed the crime and owned the devices used in the illegal activities, according to evidence unearthed by the Ghana Criminal Investigations Department (CID). Periodically there have been several arrests made and prosecutions done but it is significant to note that since the phenomenon of SIM box fraud began some years back, there has only been few successful prosecution in Sierra Leone, “The arrests are one thing and the successful prosecution is also another, of course the task NATCOM is not responsible entirely for prosecution but as far as they are concerned they have done their bit and have handed over to the relevant authorities for prosecution. Most of the suspects on trial are either discharged for want of sufficient evidence or escape after granted bail and that brings the matter to a close.

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