Public Communication Services Makes the Call to Prevent Fraud

Challenges

• Collect calls were presenting a substantial credit risk for Public Communication Services, acquired by Global Tel*Link (GTL), who provides phone management services for commercial pay phones and government institutions, including inmate facilities.
• In addition to unpaid collect calls, the competitive local exchange carriers (CLECs) were holding PCS responsible for the call transport costs if the bills went uncollected.
• Non-payment rates were in the double digits; non-payment is a key cost driver for the company.
• Since PCS was responsible for a range of outstanding charges for unpaid calls, rapid implementation was critical, particularly in the area of data preparation.
• The company researched other modeling companies; however, the time needed to learn the product was too intense.
• PCS explored building its own proprietary modeling solution, but created a business-case to turn to InfiniteInsight™, proving that time to market and resulting cost savings would justify purchasing InfiniteInsight™ and they could deploy the initial robust models in a very short time period. 

Solutions

• The InfiniteInsight™ Analytic Framework was installed and implemented within weeks.
• Used the InfiniteInsight™ Analytic Framework to create a predictive model with more than three-dozen variables - a pattern was found and fraudulent customers identified.
• New customers are scored in near-real time using the CLEC model with nine predictive variables.
• Another model scores the current customer base (400,000 customers) daily using 37 predictive variables to identify fraud risks. 

Results 

• The IT department is able to focus its efforts on the scoring application rather than the highly non-trivial task of “massaging” data to feed a mining application.
• PCS is able build models with as many variables as are necessary without having to make any assumptions, binning or encoding.
• After three months of implementation, InfiniteInsight™ had helped decrease the CLEC loss by 22%.
• By analyzing historical data, it was determined that if InfiniteInsight™ had been deployed three years earlier, collect call non-payments would have decreased dramatically, and the company’s profit margins would have realized an increase of 2.5%.