Edition 131

Serving Manufacturers, Retailers, and Service Solutions Providers

The ‘Other’ Customer –Improving Customer Experience and Increasing
Loyalty for Buyers of Retail Returns -Page 9

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Innovative Safeguards forSecuring Transactions:
How Mobile Retailers Tackle
Counterfeit Mobile Device Returns

By Stephen Manning, CSO, FutureDial, Incorporated (RLA Bronze Member)
Fraud Fallout: The High Stakes Battle inMobile Retail's Return Process
Mobile device retailers find themselves at theforefront of combating fraud and counterfeit
returns, both at the point of collection as well as
in online transactions. As the digital landscapeevolves, so do the deceptive practices employed byunscrupulous individuals. To navigate this complex
terrain, mobile retailers are harnessing advanced
technologies, including A.I.-driven authentication
and blockchain to secure transactions and protect
against financial losses. Some ways in which fraud
can occur include scenarios such as the following:•Reselling of counterfeit phones•Phones that are resold with defective parts•

Phones which were not properly authenticatedprior to reselling•

Phones being traded-in or resold which werereported as lost or stolen

EUR. This constitutes a substantial 12.9% of total
sales, posing a formidable threat to both consumers
and businesses operating within the mobile
phone industry. Counterfeit phones, often priced

Safeguarding the Reverse Logistics
Process Amidst Counterfeit Mobile
Phone Proliferation
The massive impact of counterfeiting on the reverse
logistics mobile supply chain is underscored bya comprehensive report from EUIPO-ITU. This
global study estimates that counterfeit activities
significantly affect smartphone sales, impacting astaggering 184 million units valued at 45.3 billion

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at a mere fraction of their authentic counterparts,
are infiltrating the market through the expansive
channels of widespread e-commerce platforms.
This accessibility amplifies risk, as consumers may
unwittingly purchase fake devices at one-tenthof the price, only realizing the deception whenconfronted with operational issues.

in policies and return processes. Recognizing
tactics related to return fraud and counterfeit
returns is crucial for safeguarding against financial
losses and maintaining operational integrity.
Retailers must employ advanced technologies
and stringent verification processes to prevent
fraudulent returns.

The pervasiveness of counterfeit phones further
exacerbates the challenges faced by the reverse
logistics mobile supply chain. According to OECD,
the counterfeit phone industry accounted forapproximately 20% of all mobile phones shippedinternationally. The scale of this issue becomeseven more alarming when considering theestimated loss in revenue, a staggering €45.3
billion annually, resulting from the sale of 184
million fake smartphones. Notably, prominent
brands such as Samsung, iPhone, Xiaomi, OPPO,and Huawei find themselves among the mostcopied smartphone brands.

“Fraud is prevented
by establishing astrongtraceable
processonthefront-end
thatleverages extensive
data
captureof
the products prior
to releasing to theCustomer,”noted
Jordan Sielaff,Jordan Sielaff, CoCo-Founderand CEO
Founder and CEO atof Gierd Inc.
Gierd, Inc., a company
that specializes in
helping businesses in the USA and EU to perform
authentication of products across various sales
channels. “Product Image, IMEI, shipment tracking,address verification and activating programs withthe retailers to rely on the process/system andprevent fraudulent buyers from winning the war on
theft,” he explained.

Understanding the Tactics: Return Fraud
and Counterfeit Returns
Return of goods within the reverse logistics mobile
supply chain is a focal point for combating fraud.
Retailers face challenges as shoppers exploit gaps

Mr. Sielaff emphasized that aside fromcounterfeiting, prevalent methods of online
shopping theft encompass:• False "Delivered Not Received (DNR)" claims,
where customers falsely assert non-receipt,
inflating costs.
• Illicit purchases using stolen credit cards.
• Address Fraud: during delivery, customers use
non-inhabited or third-party business addresses
to cross-dock products obtained through stolen
credit cards.
To combat these issues, Mr. Sielaff suggested
implementing reliable systems that foster trust
throughout the sales process, thereby preventing
fraudulent customers from successfully engaging
in these types of theft activities.

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Unveiling How Mobile Retailers Conquer
Deceptive Tactics with Tech
Addressing fraud in mobile retail, especially in
online trade-ins and transactions, has become
increasingly challenging due to evolving deceptive
tactics and system vulnerabilities. Onlinetransactions offer fraudsters anonymity to exploit
with false information and manipulated device
conditions.
To combat these challenges, some retailers areproactively adopting advanced technologies:(1) A.I.-Powered Verification:
Utilizing artificial intelligence to scrutinize device
conditions and user behavior, identifying anomalies
to differentiate between legitimate and fraudulent
transactions.

(2) Blockchain Technology:
Offering a decentralized and distributed digitalledger system for transparent and securetransactions, mitigating risks linked to fraudulent
returns.
The fusion of A.I.-driven authentication andblockchain strengthens transaction security andenables retailers to stay ahead of fraud.
Some leading companies providing authentication
technologies to help combat fraud include:•Prolog Mobile (https://prologmobile.com/) :Prolog Mobile pioneers mobile device analytics
and transactions, offering comprehensive
solutions in IMEI analytics, API services, andcarrier compatibility, delivering value-based
decisioning analytics for the global reverse
supply chain.

Some Phone Processing Systems have theAbility to Detect Lost/Stolen Devices...

(Image Source: FutureDial Inc. Lean One-TouchTM Software

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transactions every day for law enforcement,
wireless carriers, insurers, recyclers, retailers
and consumers.
•Device Forensic (www.deviceforensic.com) :Technology developer for mobile device IMEI
identification and verification, and accurately
identifying device model specifications andpotential issues for the reverse supply chainindustry.

The Shared Responsibility in Fraud
Prevention•Recipero (https://www.recipero.com/) : A leader
in crime and fraud intelligence solutions for theworld's mobile device communities, with a suiteof powerful data gathering and intelligencesolutions, which together contribute to millionsof global decision making processes andAddressing the rampant fraud and counterfeit
returns in the mobile phone retail sector
necessitates a concerted effort fueled by proactive
technology adoption. As the industry progresses,
it becomes imperative for all stakeholders tounite in devising and executing comprehensive
strategies to detect and deter fraudulent practices.
Moreover, consumers play a vital role by staying
vigilant, making educated buying decisions, andacknowledging the risks linked with counterfeit
products. In today's technology-driven landscape,
combatting fraud isn't merely a task for retailers; it'sa collective responsibility essential for upholding
the integrity of the mobile phone market.

Stephen Manning

Chief Strategy Officer, FutureDial, Inc.
Stephen Manning, the CSO at FutureDial, Inc., has over three decades of extensive expertise in Information Technology across various global domains, encompassing ecommerce, wireless technologies,
outsourcing, reverse logistics, operations, sales, marketing, and finance. At FutureDial, Stephen spearheads the company's sales and business development endeavors, collaborating closely with prominent
entities in the mobile device reverse logistics sector, such as tier-1 wireless carriers, third-party logistics
providers (3PLs), mobile network operators (MNOs) and mobile virtual network operators (MVNOs),
as well as mobile device trade-in and buyback operators, and phone resellers. Prior to his tenure at
FutureDial, Stephen held pivotal leadership positions, including Chairman and CEO at Recellular Inc.,
President and CEO at CloudMSP, and Senior Vice President at Solectron Global Services, among others,
showcasing his versatile leadership capabilities. His rich career trajectory also includes notable rolesat Sequel Inc., AT&T, and other renowned organizations. Stephen holds a Bachelor of Science degreein Economics and Finance from the University of Nebraska and is a Certified Public Accountant (CPA),underscoring his strong academic foundation and professional acumen.

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