Fraud costing TSTT $50 million per year

"Taken from our B U S I N E S S section."

TSTT has been losing between $30 to $50 million annually due to telecommunications fraud and will have a “secure system” in place by the end of fiscal 2006 to crack down on the fraudsters, some of whom may be TSTT employees.

This was the commitment given yesterday by TSTT chief financial officer Joel Edwards following the opening of a Cable and Wireless Fraud workshop at the Crowne Plaza Hotel in Port-of-Spain.

Speaking with journalists, Edwards said approximately three to five percent of TSTT’s annual revenue ($3 billion) is lost due to the actions of fraudsters. In terms of numbers, Edwards explained the quantum lost annually by TSTT due to telecom fraud was between $30 to $50 million. Stating that these losses have been going on since “time immemorial” in the telecom industry, Edwards said TSTT is now putting strategies in place to reduce leakage due to telecom fraud and will have a secure system in place around its operations by the end of fiscal 2006.

Asked whether any TSTT workers were involved in acts of telecom fraud, Edwards did not dismiss this possibility but said most of the available evidence suggests that the fraud is committed outside of the company’s operations. “If that’s the case, we’ll deal with them as it comes,” he stated.

Asked to comment on an observation from TSTT CEO Carlos Espinal that acts of telecom fraud increase when competition enters a market, Edwards said he was not certain this was so. However he indicated that as any telecom market (whether it is a monopoly or is highly competitive) develops, people find more ways to commit fraud.

Edwards added that by ensuring that its own house is protected, TSTT will help to deter fraudsters from targeting other companies in the local telecom market.

He identified cloning on TDMA cell phones, calling patterns and software systems as some of the avenues which fraudsters use to carry out their schemes and said TSTT is addressing all of these areas.

Edwards was uncertain whether the monies generated from telecom fraud worldwide outstripped monies generated in the international drug trade because it was difficult to attach numbers to either of these crimes.

Noting that telecom companies around the world lose between three to 15 percent of their revenue due to fraud, Edwards said no nation has ever been able to totally eliminate telecom fraud and the internationally acceptable level of telecom fraud is 1.5 percent of annual revenues.