em got to be SO bad that wireless providers needed to build all sorts of safeguards into the sales and activation process just to try to catch these situations as soon as possible. (This problem was made especially aggravating when the cloners used the phone to make long distance phone calls. The wireless provider had to pay long distance carriers for calls that were never registered or paid for.) Newer wireless technologies like CDMA and GSM have eliminated the majority of cloning cases by making use of encrypted partial and full keys and handshake protocols that make cloning virtually impossible. Figure 3-3: Fraud Today, fraud cases are usually associated with tracking down the theft of actual handsets or with customers violating the terms of their contracts. Non-Payment Churn (Customers with Credit Problems) A problem that is growing in importance for many carriers is non- payment, or credit, churn. This situation occurs when subscribers fail to pay their bills, usually for several months in a row. eXcellence in Telecommunications The Telco Churn Handbook Credit churn is a particularly interesting form of churn. It is completely up to the carrier if or when to cut off the customer and terminate the contract. There are customers who will continue to use the phone for as long as they possibly can with no intention ever to pay. Then again, there are also customers who intend to, or will at least try to, pay when offered some assistance. This makes credit churn a challenge for the provider. If you are too abrupt or offensive with the customers, you run the risk of angering them and encouraging them to go to a competitor (who might get paid on time every month). On the other hand, if you are not firm enough you run the risk of donating a lot of airtime to a customer who will never be any good. Figure 3-4: Non-Payment Churn (Credit) The whole problem of customers and churn has several layers of treatment. Don't Give Phones to People with Credit Problems The process of checking out customers' credit ratings before gi