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Toll Fraud Can Put SMEs Out of Business

Few SMEs could recover from a phone bill 10 times bigger than usual.

Alison Job

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Many SMEs try to do things themselves and on the cheap, but when it comes to cloud-based switchboard solutions, doing that can open you up to huge bills, thanks to fraud syndicates. And huge telecoms costs are what few start-ups can ill afford.

Toll fraud targeting telephone systems has been around ever since people started devising ways not to pay for phone calls.

The difference with toll fraud targeting VoIP switchboards that SMEs have most probably installed themselves, is that this type of telephone fraud is not about making a free long distance call to mom and dad.

“Local and international fraudsters cracking an SME’s poorly-installed VoIP switchboard can put a small business out of business in minutes,” says Greg Massel, MD of Switch Telecom.

Massel explains that the toll fraud threat to the liquidity of SMEs, in particular, comes from the fact that fraudsters can ring up tens of thousands of rands in phone bills in minutes. “The business owner would be liable for those charges and most SMEs would find it very hard to recover from a phone bill that is perhaps ten times bigger than usual.”

How does it happen

Voice over Internet Protocol (VoIP) technology uses the Internet to make and receive phone calls, and not infrastructure owned by the traditional telephone networks, so it is significantly cheaper and attracts cost-conscious enterprises such as SMEs.

“Toll fraud problems arise when SMEs use an unqualified person to install their office PBXs. Unfortunately, in the long run, using an internal employee not adequately versed in the installation of VoIP switchboards can be extremely costly for a number of reasons,” explained Massel.

These include:

  • Proper user names and passwords are seldom maintained
  • Security patches are not regularly updated
  • What happens when the only person in the business who has any understanding of the VoIP PBX leaves the company.

How the fraud works

The most common type of VoIP toll fraud involves international premium numbers. Premium numbers operate on a revenue-sharing basis, where the telecom’s operator pays a portion of the call revenue to the company that owns the number.

Typically, a VoIP subscriber’s PBX system is hacked and the hacker then uses the system to make multiple calls to a premium number registered by accomplices. The hacker then receives a percentage of that revenue back from the operator and the VoIP business subscriber ultimately foots the bill.

Preventing toll fraud

“The best option is for companies to engage the services of an experienced VoIP provider that can properly set up a fully managed VoIP PBX solution,” he says.

A specialist VoIP provider will:

  • Set up credit limits on client accounts
  • Properly maintain security patches
  • Ensure that any untoward “toll fraud” activity is speedily identified and combatted.

Alison Job holds a BA English, Communications and has extensive experience in writing that spans news broadcasting, public relations and corporate and consumer publishing. Find her at Google+.

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1 Comment

1 Comment

  1. Bruce Sanderson

    Jan 2, 2014 at 20:19

    Very good explanation of the vulnerabilities that so many are not aware of until it is too late. This is only going to get worse as the current $5 Billion USD fraud accounted for in 2011 will grow as the move to IP based voice grows. Thanks for getting the news out there.

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Entrepreneur Today

Bonang Matheba Announced As 2018 AWIEF Awards MC

AWIEF has announced multi –award winning radio host, TV presenter and style icon, Bonang Matheba as the 2018 AWIEF Awards MC and host.

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Bonang Matheba, affectionately referred to by fans as Queen B, has firmly positioned herself as Africa’s most sought after entertainment personality and SA’s number one social media darling.

With just three weeks from recognising, honouring and celebrating women entrepreneurs and business-owners in Africa for their innovation, excellence and contribution towards economic growth and social development, AWIEF has also announced songstress, BUCIE as the music entertainer for the night.

40 Finalists out of more than 1350 nominations were revealed for the AWIEF Awards last month. Winners will be announced at The Westin Hotel in a five-star gala dinner on 9th November 2018.

Tickets to the awards evening are selling fast. To secure your seat, please click here.

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Things Schools Need To Stop Doing To Grow Entrepreneurs

Here are 8 things that would make a significant impact on generating enterprising behaviour.

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It is no secret that the current structure of the education system was designed in an entirely different age to achieve economic outcomes that are no longer viable due, in large, to the rapid innovation and adoption of technology.

But if we are to hope to help President Ramaphosa implement his vision for entrepreneurship as stated in the SONA 2018 address as, “The establishment through the CEOs Initiative of a small business fund – which currently stands at R1.5-billion – is an outstanding example of the role that the private sector can play. Government is finalising a small business and innovation fund targeted at start-ups,” we need to change how and what schools are teaching for this to be realised on a large scale.

Here are 8 things that would make a significant impact on generating enterprising behaviour:

1. Stop teaching kids using one or two teaching methods

Typically, teachers have defaulted to talking, reading and some visual aids to impact knowledge to learners and those children that don’t learn using these primary methods are at a disadvantaged and are often labelled as challenged. There are at least 6 different ways in which people learn, and entrepreneurs often fall into the lesser known ones. By blending methodologies that include interpersonal, kinaesthetic and intrapersonal with the more traditional ones, entrepreneurs will learn more effectively.

2. Stop Rewarding Conformity

Maybe it comes from a fear of anarchy or lawlessness, but the stringent rules that exist in schools punish children for exhibiting individualism and reward children for staying in line. Quite literally. This unwavering adherence to the rules without question, breeds thinkers of the same calibre and releases into the world children that cannot function without set structures that they must conform to when they actually need to be creatively problem solving in order to make a mark for themselves.

Related: Spark Schools: Adapting At The Speed Of Scale

3. Stop Measuring Memory

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How well a child can retain the dates, figures, theories or equations does not indicate the measure of a child’s intelligence. It only indicates how well their memory works and how adept the learner is at recalling what they have read or been taught. Remembering, according to Bloom’s Taxonomy, is a lower order thinking skill. Instead, let’s measure critical thinking, interrogation of ideas, application of thinking across contexts.

4. Stop Being a Teacher

When the world relied on a central person as the curator of knowledge, the world needed teachers. They were idolised and hailed as a custodian of growth and development due to the fact that they knew more about their subject than anyone else in society.

Today, the internet is the purveyor of information, a teacher if you will, and children no longer need to be taught the information but what to do with it. So long as children can read, the job of person at the front of the class is to educate not to teach.

5. Stop Running a Factory

From the uniforms to the desks to the bell that signals the start and end of lessons and the allotted amount of time dedicated to eating and going to the bathroom, schools are churning out citizens primed for factory work. The production line mentality has been conditioned into our children so much so that with the entry of technological automation and the removal of the human element in these mundane, routine tasks, we make them immediately redundant to the world.

6. Stop Labelling Every Disruptive Child as ADHD/ADD

As an educator myself and now an entrepreneur, I recognise the exhausting and relentless burden that our school-based teachers bare. They are weighed down with administration and parental expectations all whilst trying to navigate an education system that is increasingly deficient. Any child that does not learn in the usual manners and requires more attention or additional stimulation by non-traditional teaching methods.

If, as a country, we are dedicated to changing the current economic outlook not just for ourselves but for those that will inherit this legacy then the systems that shape our thinking must be changed too. Entrepreneurial thinking and action is discouraged and punished in our current education system and only once children leave behind the 12 years spent at school can they begin to unlearn this way of mental conditioning and become active citizens.

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Chivas Venture Calling On South African Start-ups To Win A Share Of $1 million

South African applications for the Chivas Venture 2019 Now Open!

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Today Chivas Regal announced the launch of the Chivas Venture 2019 – a global competition that gives away $1 million in no-strings funding every year to the hottest social start-ups from around the world.

The Chivas Venture provides a global platform for innovative enterprises that are using business to solve an array of social and environmental issues – and today marks the opening of the South African applications. 

Since the competition’s launch in 2014, Chivas Venture-supported enterprises have enriched the lives of more than 1 million people in over 40 countries, across six continents.

Just as Chivas blends together whiskies to create award-winning Scotch, the Chivas Venture champions entrepreneurs who blend profit and purpose. Chivas’ belief in blending ambition with generosity, and in using success to enrich the lives of others, was instilled in the 19th century by founding brothers James and John Chivas. Today that philosophy is kept alive not only through award-winning Scotch, but also through initiatives including the Chivas Venture.

Richard Black, Global Marketing Director for Chivas, said:

“At Chivas we believe that blended is better – in life, business and Scotch – and the 100 finalists we have supported to date have proved this, finding the right blend of profit and purpose in their ventures. Since taking part, finalists have reported saving 8 million trees from deforestation, providing 24 million litres of safe drinking water to those in need, and funding 75,000 days of education for women and girls – and that’s just a few examples. The Chivas Venture is continuing to have a global impact and we are proud to be investing another $1 million for 2019.”   

Related: Venture Capital 101: The Ultimate Guide To The Term Sheet

Applicants in each participating country will compete in local heats, with the South African winner flying to the United Kingdom to take part in an exclusive Accelerator Programme. Hosted by The Conduit – a new London establishment that serves as a home for a diverse community of people who are passionate about social change – the intensive training programme will give the global finalists the chance to hone their business and pitching skills.  

Following the Accelerator Programme, the allocation of the first $100,000 of the fund will be put into the hands of the public with three weeks of online voting. The Chivas Venture 2019 will then culminate in a series of high-stake pitches at the Global Final in Europe, where the finalists will battle it out for the remainder of the $1 million fund.

Radley Connor, Marketing Manager for Chivas Regal SA says, “The Chivas Venture is an amazing platform for South African social entrepreneurs to attract investment and gain global exposure. The competition rewards and celebrates individuals whose purpose is to make a positive difference to society. If you have a great idea, that meets the requirements, we encourage you to enter.”

In 2017, innovative South African water company I-Drop water placed third in the global finals, walking away with close to R1 million in funding. Since winning, founder James Steere has received interest from investors globally.

Clement Mokoenene is the 2018 South African winner and the creator of the Vehicle Harvest Energy System (VEHS). His business is able to generate electricity at a much lower, affordable cost than coal-fired power stations which South Africa currently relies on. The system works by installing an overlay on the existing road to extract the pressure and transferring it to the side of the road, similar to a wind turbine. Mokoenene says a 1km highway stretch could generate enough energy to supply the entire South Africa.

To apply for the Chivas Venture 2019 and find out more about why blending profit and purpose is better, visit the Chivas Venture website.

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