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As more businesses migrate their phone services to voice over internet (VoIP) protocol from traditional landlines, they leave themselves exposed to a vulnerability they may not have considered or were even aware of – telephone fraud.
Telephone systems can be accessed via computer networks, voicemail, prepaid calling cards or SIM card information and exploited to make numerous automated telephone calls to long-distance and premium phone numbers, leaving their victims to foot enormous phone bills.
Along with education and robust telephone and cybersecurity systems and practices, telephone fraud coverage can help your business mitigate the risk and losses of telephone fraud. Consider what security measures your business requires to prevent telephone fraud from happening to you by getting in touch with a customer service rep from your telecommunications service provider.
What is Telephone Fraud?
Telephone fraud (aka telephone toll fraud or telecommunications fraud) is when hackers gain access to a company’s phone lines (or their provider’s) and, using relatively simple computer equipment and programs, will make hundreds or thousands of phone calls to international long-distance numbers or to premium numbers that charge callers per minute (e.g. psychic hotlines) that the fraudsters have leased and for which they receive a percentage of the toll charges for each call.
Telephone fraud usually happens on a weekend when nobody is in the office or monitoring the phone systems and the victims usually don’t find out until they receive a massive phone bill.
What is Telephone Fraud Coverage and How does it Work?
Telephone fraud coverage is an optional insurance product extension that can be added to a Cyber Liability & Privacy Insurance policy, a Crime Insurance / Employee Fidelity Insurance policy or both, and can cover the costs of fraudulent phone charges. Which telephone fraud coverage extension will respond depends on how that fraud was perpetrated.
For example, if the telephone fraud was committed by hackers breaching your computer systems or network, your Cyber Insurance policy would likely be triggered (if you opted for the coverage). And if the fraud took place because of the actions of an employee, for example, your Crime Insurance’s telephone fraud coverage would be activated, again, assuming you opted for the coverage extension.
It’s important to review your coverages with a broker to ensure that all of your policies are coordinated, eliminate any redundancies and optimize your coverages and limits.
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Commercial insurance is all we do. We’re insurance company experts at protecting businesses from the risks, frauds and perils they face. And with the relationships we’ve built over the years with Canada’s top insurance companies, we’re able to insure our clients with responsive and comprehensive coverages at the best possible rates.
Contact an ALIGNED advocate to discuss your business’s fraud security protection and risk management needs and for more information on the steps and insurance plan you can take to prevent telephone fraud.
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