SMS fraud prevention should be one of the top priorities for large enterprises and governments. As fraudsters become more organized and effective, more businesses are suffering the cost of mobile fraud and data breaches. Learn here some tactics to avoid them.
According to Fraud.com, typical businesses lose 5% of annual revenues due to fraud. “When this is applied to global GDP from the year prior, the result is an estimated $3.7 trillion in annual fraud losses.”, they said.
SMS fraud has a high financial and reputational cost for businesses. Not only because of the value of what is stolen but also for increased customer support, loss of customers and revenue, and the legal overhead.
Some types of text message fraud are more common than others, such as smishing, SIM swapping, and SMS Pumping. It’s important to recognize them and also to know how to prevent and solve them once they have occurred.
Only a reported 14% of businesses can fully recover from unauthorized transactions and other fraudulent activities.
Recommendations to Prevent SMS Fraud
SMS fraud prevention must evolve at the same pace as fraudsters’ technics. Awareness is critical, but it’s not enough. Our security experts make these recommendations to prevent each type of fraud.
How to prevent Smishing
SMS Phishing or smishing is a common SMS fraud that aims to steal data and money from final users by sending an SMS with an illegitimate link.
Our recommendations to avoid smishing are:
- Increase security awareness and teach users/ partners how to both recognize and report a smishing attack.
- Send simulated smishing attacks to employees annually and measure the result to improve security training.
- Implement two-factor authentication in your apps, which will make it harder for fraudsters to gain access to your systems even with an employee’s username and password. Restrict your application access using IP address controls as an additional form of verification.
How to avoid Message Trashing
Message trashing is one of the 14 types of text message fraud identified by the Mobile Ecosystem Forum. According to the MEF, “fraudsters try not to deliver a validly formatted Business SMS message with valid content intended to be sent to a valid mobile subscriber number (MSISDN).”
Tips to avoid message trashing:
- Assess SMS vendors and senders carefully. If you encounter a price that is far below the competition, it could be trashing messages.
- Include known and internal numbers in your batch of contacts. If you receive message delivery receipts for messages that weren’t delivered, you can investigate.
How to prevent Access Hacking
As its name says, access hacking is when fraudsters try to hack credentials to access platforms, apps, devices, or any IT infrastructure. You can prevent this fraud by:
- Consult with your IT and security teams to enhance the security of your login procedures. This can include single sign-on, multifactor authentication, one-time passwords, and restricted IP access to internal tools.
- Implement a hierarchical structure within your software tools to protect customer data from standard users.
How to prevent SMS Pumping
As it is difficult to detect and has costly consequences, we have created a complete guide to understand SMS Pumping. Here we will focus on some tips to prevent it.
- Monitor for high volumes of incomplete login attempts (for OTP SMS pumping attacks).
Look for adjacent number inputs in rapid succession and alert your traffic provider. Often victims will see a block of sequential mobile numbers (+99999999990, +99999999991, 99999999992, etc.) that were provided by the SMS pump service and are controlled by the route operator.
- Report any unexpected spikes in traffic as early as possible and investigate the source.
Set a volume cap and alerts on all mobile number gathering forms or logins.
- Set rate limits on your OTP webform input box so that it won’t send more than one message per X seconds to the same number or country prefix.
- This may not prevent the fraud, but it might discourage fraudsters from targeting your app in the first place.
- Implement rates by API user or IP address.
- Build an allow or blocking list for your system based on country code.
- Modify your OTP user experience by using CAPTCHAs or other services to detect and deter bots. If this negatively impacts your acquisition, you can try some of these 7 simple bot detection methods that won’t inconvenience users.
Educate yourself to prevent SMS Fraud
There’s no doubt SMS is a fundamental channel for communicating with audiences. As it’s a must-have for business communication, it’s also important to learn about secure messaging and be aware of its vulnerability points to take full advantage of it without taking risks.
SMS attacks are no longer exceptional. Fraudsters and bad actors are working with an increasing level of orchestrated collaboration to attack multiple systems on an international stage.
We know that it’s impossible to predict what mobile fraud threats will look like in the near future. But one thing is certain: fraudsters will seek out schemes with the biggest payout, which are likely to be increasingly complex and costly.
Do you want to learn more about SMS fraud prevention strategies? Fill out the form to download our new security whitepaper “Protecting Your Enterprise from the Next Generation of Mobile Fraud Schemes.”