Connect with us

Entrepreneur Today

Toll Fraud Can Put SMEs Out of Business

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

Alison Job

Published

on

VOIP

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+.

Advertisement
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.

You must be logged in to post a comment Login

Leave a Reply

Entrepreneur Today

The Innovator Trust And Citi Are Searching For Black-Owned Smes Who Are Ready For Growth

The Innovator Trust, an enterprise development organisation, and the Cape Innovation and Technology Initiative (CiTi), Africa’s oldest incubator, are calling on Cape Town-based growth-stage ICT entrepreneurs to join the intensive 2-year enterprise development programme.

Entrepreneur

Published

on

the-innovator-trust

The ICT sector has gone from strength to strength and is one of the fastest-growing industries on the African continent. Yet African entrepreneurs are still finding it a difficult business landscape to navigate. That is why The Innovator Trust and CiTi, through exposure, training and mentorship, now aim to equip entrepreneurs and businesses in the sector with tools that will keep them on track, assist them to achieve their goals and create tech leaders of the future.

ICT entrepreneurs in need of mentorship, skills development and business support who have been operating for more than 2 years and are fiercely committed to growing their business, can now apply to the prestigious 2-year Innovator Trust programme, co-developed and run by CiTi at the Woodstock Bandwidth Barn and remotely in Cape Town. Applications close on 22 February and the selected candidates will be announced on 4 March.

The Innovator Trust programme aims to support the: increase annual turnover, equip businesses with the necessary accreditation to remove red tape, as well as increase profitability and number of employees. Get ready to move the dial on your business.

Celebrating its 20th year of supporting entrepreneurs, CiTi currently runs a number of incubation programmes from idea to growth stage. After a very successful first cohort of the programme, completed in 2018, CiTi confirmed a second collaboration with the Innovator Trust to support further Cape Town businesses over the next two years. Applicants need to be in “ICT”, but this has included a broad range of focusses in the past, from IT recruitment, network security to cabling service provider and software solutions.

Related: Watch List: 50 Top SA Black Entrepreneurs To Watch

The programme, designed by CiTi and Innovator Trust, is not to be taken lightly. Monthly training, mentorship sessions with industry experts, and a strong focus on technical improvements means a substantial time and focus commitment by the entrepreneur. But this intensive design enables significant business progression over the two years.

 “Once the entrepreneurs who take part in our Enterprise Development programmes become more established, they turn their focus to growth. This accelerator is especially for entrepreneurs who’ve created businesses with high-growth potential and provides them with the skills to scale at speed and responsibly,” says Tashline Jooste, CEO of the Innovator Trust.

Cape Town was recently confirmed as the Tech Hub of Africa, by an Endeavor Insight Report commissioned by CiTi and partners, presenting growing opportunities for those businesses serious about growth, and with the right support.

“I believe strongly that ICT entrepreneurs are going to be critical to South Africa’s economic growth, which is why we need to focus on equipping these businesses with the skills they need to grow, create jobs and stimulate our economy,” adds Jooste.

In order to be considered for the programme, prospective applicants must meet the following criteria:

  • A company defined in South Africa as an SMME, QSE or EME;
  • Must be operational and trading for two or more years;
  • The business should be at least 51% black-owned;
  • A minimum Level 1 – 4 BBBEE status according to the DTI or ICT Codes;
  • The business must be a registered company with key focus in ICT and be based in Cape Town and surrounding areas.

In addition, applicants will need to supply copies of their company registration, company profile, and annual financial statements along with their BEE certificate and IDs with their applications.

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

“We had a fantastic experience on the Innovator Trust programme, perhaps most beneficial was the advice and mentorship on our financial management, up-skilling of our team, and establishing a 3-year budget and growth plan for the business. Our advice to entrepreneurs considering the course is “JUST DO IT!!!” The skills and knowledge you gain are invaluable and put us on a serious growth trajectory.” states Jennifer Classen, Founder of Ngaphaya Y2K10, and Participant in the 2015 – 2018 Innovator Trust programme.

Ready to grow your business? Learn more about the programme and submit your application HERE.

Continue Reading

Entrepreneur Today

Rocket Challenge Targets Local Coding Skills

The Rocket APT Challenge is open to undergraduate students 18 years of age or older who are currently studying engineering, science, or technology at an accredited college or university.

Entrepreneur

Published

on

coding

Addressing the growing skills gap within software development, local information technology value added distributor, Axiz has sponsored the Rocket APT Challenge and encouraged 39 students to participate in the regional round of the Rocket.Build coding challenge. This comprises 40% of the total numbers of entries received globally. Hosted by Rocket Software and APT Solutions, this annual challenge provides a forum for participants to develop applications on Rocket’s MultiValue platform.

Colleen Becker, Axiz pre-sales engineer, says that the response to the challenge was exceptional and the company is excited to be part of this global initiative: “This is a fantastic innovation challenge that provides students with an opportunity to hone their coding skills on a leading software platform. South Africa is by far the bigger pool of entrants and we are excited to see who is selected for the global Rocket.Build 2019 Hackathon.”

Participants are required to design an app on Rocket’s MultiValue application platform in support of the challenge theme: ‘Improve your Community’. Consisting of three regions: EMEA, Asia-Pacific, and the Americas, three winners from each region will be selected and awarded a cash prize of:

  • $1,000 (USD) – third place
  • $2,500 (USD) – second place
  • $5,000 (USD) – first place

Related: Want To Take Your Coding To The Next Level? Check Out These 7 Productivity Hacks

The nine developers will also be given an all-expenses-paid trip to Massachusetts, USA in June 2019 to participate in Rocket.Build 2019, where they will compete in teams of three to decide the global winner of the Rocket APT Challenge. The winning team will share a grand prize of $24,000 (USD).

Becker says that this is the first year Axiz is participating and the company will definitely register for the 2020 challenge, recruiting of which starts in September 2019: “We are committed to grow the number of young coders on the Rocket platform. There is a global opportunity for students to graduate into a developing industry and support the growing shortage of MultiValue-certified coders. Participants also stand the chance of receiving an internship from participating partners across all industry sectors.”

The Rocket APT Challenge is open to undergraduate students 18 years of age or older who are currently studying engineering, science, or technology at an accredited college or university.

For more information, contact colleen.becker@axiz.com

Continue Reading

Entrepreneur Today

SMEs: Have You Completed Your Financial Planning For 2019?

While small to medium enterprise (SME) owners may not have a great deal of control over South Africa’s broader economic issues, they do have control over how they plan and manage their finances, says EasyBiz Technologies Managing Director, Gary Epstein.

Entrepreneur

Published

on

financial-planning

“The failure of many SMEs to make it past the critical 3.5-year mark is more as a result of their inability to get the fundamentals right, rather than being able to deal with issues such as political uncertainty, crime or credit-rating downgrades.

“Several SMEs do not gain an adequate understanding of their markets or the competition they are up against. In addition, failure to manage their finances properly or to access funding and adapt to changes in the marketplace can also be serious hindrances to success.”

Epstein believes without proper financial planning and management, businesses place themselves on the back foot. “Business owners can only make informed decisions when they have a clear view of what is happening with their finances.”

That’s why having the proper financial management tools in place is so important for start-ups and SMEs. “At EasyBiz Technologies, we offer accounting solutions that are aimed at helping businesses manage their finances properly and placing them on a sound financial footing,” adds Epstein.

Tangible outcomes of a good system include increased productivity, reduced monthly expenses, improved accuracy, simplified tax compliance and better financial security. An effective system can also provide critical business insights and allow business owners to make informed and proactive decisions.

Epstein says efficient accounting solutions can help speed up business processes, affording business owners more time to focus on their core processes and growing their operations. “After all, time and money are the most precious resources when it comes to running a small business.

Related: 6 Steps Of Financial Planning

“Our solutions include analysis tools, report making applications and payroll assistance. In addition, income and expense trackers provide valuable information for tax and audit preparations,” he adds.

Epstein urges SMEs to plan for 2019 if they haven’t done so already. “It’s not too late to prepare for the year ahead and, with the financial year end for many businesses looming, now is the time to get a good system in place.”

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending