Three arrested over Rwf1bn SIM box fraud targeting MTN Rwanda

Between January and October this year, MTN Rwanda and Rwanda Utilities Regulatory Authority (RURA) lost about Rwf1Billion in revenues owing to sim-boxing fraud.
Sim Box
Sim Box

Between January and October this year, MTN Rwanda and Rwanda Utilities Regulatory Authority (RURA) lost about Rwf1Billion in revenues owing to sim-boxing fraud.

A SIM box fraud is a setup in which fraudsters install SIM boxes with multiple low-cost prepaid SIM cards.

The fraudster then can terminate international calls through local phone numbers in the respective country to make it appear as if the call is a local call.

When a call is made from for instance Europe to Rwanda, to reach Rwanda, it requires carriers. These are agents of sorts between the initiator and the recipient.

Fraudsters can work with carriers giving them a rate cheaper than the telco’s international calling rate.

The carriers then wire money to the local fraudsters after a certain volume of calls.

For instance, if an international call is priced at Rwf50 per minute, the sim-box fraudsters can connect it at say Rwf20 and receive a kick-back from the carriers.

This is usually the case when one receives an international call which registers as a local MTN call.

Keen to curb the revenue leakage, the telco and the regulator worked closely with the Rwanda National Police for weeks with operations leading them to a criminal syndicate that was traced in the country’s resort town of Rubavu.

Over the weekend, police, MTN Rwanda and RURA nabbed three suspects operating from Rubavu town and confiscated equipment and hundreds of sim-cards used in the fraudulent activities.

Police Spokesperson Assistant Commissioner of Police Theo Badege confirmed to The New Times that they had apprehended three suspects and confiscated equipment used by fraudsters.

“The cyber-crime unit alongside partners was able to unmask a criminal network and in the process arrested three people. We suspect that they have a regional outpost but investigations are still ongoing,” he said.

Of the Rwf1 billion loss, about Rwf450M was revenue to the regulator while MTN lost over Rwf550M.

Police noted that this is the second such case after a previous one involving nationals from Nigeria, Uganda and Rwanda who were operating in Rubavu and Kicukiro but were also apprehended.

The device can be acquired for about $2500 but requires other supporting infrastructure such as routers and power backups.

Emmanuel Byamungu, the head of MTN Rwanda Business Risk Management department told The New Times that agencies have gadgets and equipment that monitor the use of the sim-box gadgets.

“The state-agencies as well as MTN Rwanda have gadgets that detect such numbers being used by the fraudsters. Once we detect such numbers, we block them. Fraudsters in turn replace the sim-cards with new ones,” Byamungu said.

A sim-box machine can hold over 30 sim-cards at a time.

Terming the fraud as increasingly becoming popular and major cause for revenue loss, he said that they would continue to detect and work with state agencies to see further apprehension of fraudsters.

"We will raise awareness among our agents to make sure that they only sell our sim cards to genuine customers. As fraudsters become cunning, we will boost out skills to ensure we are a step ahead," Byamungu said.

He called on members of the public to support them in curbing the crime by reporting international calls which register as local calls to MTN or the national police.

RURA spokesperson Tony Kulamba, said that the activity is not very rampant but remains a problem that requires to be addressed.

“We had information that some people were illegally operating the sim boxes. We had an operation and we were able to arrest them. It is not very rampant but it is a problem that we have to monitor and curb,” he said.

Despite the arrest of the suspects, there remains concerns of the level of awareness among some agencies such as Rwanda Revenue Authority who cleared imports into the country.

Experts say that the machines could have been imported and cleared at a point of entry with officials unaware of the threat they pose.

Police said that the apprehension was courtesy of the cyber-crime unit capabilities as well as the capacities at the regional cyber-crime centre of excellence.

Other than revenue losses, the trends could make it hard for authorities to trace calls that have been linked to crime.

With thousands of sim-cards required to run the operations, there is a chance that they could lead to wrong numbers of mobile penetration.

Globally, the sim-boxing is estimated to cost the industry about $3 billion every year.