Understanding VoIP – Fixed vs. Non-Fixed

If you aren’t already familiar with “Voice over IP” telephone services, or VoIP for short, you should be. It has become a popular and inexpensive form of telephony – and also one of the most common technologies used in committing retail and cyber fraud. Knowing how it works, and when to be cautious about it, is the first step to reducing your fraud exposure.

Of course, not every VoIP user is a cybercriminal – nearly 46% of Americans use VoIP as their primary phone line nowadays. Some of the largest global firms, including Google and Microsoft, are providers of VoIP services. Understanding VoIP also forms an important part of your contact data quality, particularly when it comes to maintaining compliance with current regulations on automated outbound telemarketing. Knowledge is power when it comes to fighting the small minority who intentionally misuse this technology AND knowing which contacts are safe to call.

What is VoIP?

VoIP, which stands for “Voice over IP” encompasses a group of technologies which provides delivery of voice communications over Internet Protocol (IP) networks. VoIP is available as a replacement to traditional phone services via public switched network (PSTN) in addition to subscribers using mobile phones, personal computers and other internet access devices. Note that VoIP does not bypass PSTN entirely; rather, it interfaces with a regular phone number but sends your voice data through the Internet using the same packet-switching technology that serves your email or YouTube videos, terminating at a software or hardware “phone.”

By using Internet telephony to bypass the infrastructure of traditional phone systems, the cost of these calls can be can be as low as zero, on top of the cost of your Internet service. Some of the benefits of VoIP services include low priced or free calling and number portability, while some of the drawbacks include lack of common phone services such as phone directory, 411 and in some cases 911 services.

How does it work?

There are several different methods to connect voice services over the internet including using an IP phone, an Analogue Terminal Adapter (ATA), or softphone which is an application installed on an internet connected device. Common examples of IP phones include the Cisco brand phones which can be used with any VoIP service provider, while Analogue Terminal Adapters may be tied to a specific carrier (i.e. MagicJack). A VoIP service provider will provide services that complete a phone call using broadband networks that are interfaced with PSTN (Public Switched Telephone Network).

Fixed vs. non-fixed VoIP

With respect to VoIP service providers, there are generally two types of VoIP services, Fixed and Non-Fixed. A client that is using a fixed VoIP service would be associated with a physical location and cannot be obtained from someone that is outside the country. Common Fixed VoIP providers include Vonage, BroadVoice, and Cox Communications.

Non-Fixed VoIP services, on the other hand, do not need to be associated with an address and are thus easily obtainable by individuals that are outside the country. Common Non-Fixed VoIP providers include Google Voice and Skype. Because VoIP numbers can be difficult to trace – particularly non-fixed numbers that can be obtained through a simple email signup – they are often a favorite of criminals who place orders using stolen or compromised credit cards or other fraudulent financial information, often operating from offshore locations. Fraudsters have also been known to hack other people’s VoIP installations for profit or anonymity.

Another issue with both types of VoIP is regulatory compliance. Strict laws exist for automated telephone and text message marketing, particularly to wireless phones, such as the US Federal Telephone Consumer Protection Act (TCPA). While the implications of TCPA for VoIP numbers remains murky, with at least one legal precedent ruling that it does not apply directly to at least free VoIP services, it is important to ensure that VoIP numbers have not been subsequently ported to cellular service and/or a new owner.

Prevent VoIP-based fraud and maintaining compliance

As you gain prospects or take orders, automated data quality tools can help you verify a contact’s phone line type and ownership. Identifying suspect phone numbers that belong to Non-Fixed VoIP providers early is an important first step in fraud prevention and protection, allowing you to flag potentially fraudulent transactions for further review. These same tools also help automate the process of verifying contact data for regulatory compliance.

Service Objects offers easy-to-implement tools for phone number validation and reverse lookup, as well as appending missing phone data to contact information. We also offer US/Canada and international lead validation services that provide a quantitative rating of lead quality using multidimensional analyses, as well as bundled lead enhancement services that combine validation with appending missing contact data. For more information on these tools or a no-obligation free trial, contact us and we’ll be happy to help!


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