The widespread use of smart devices worldwide has resulted in vast volumes of user data and its interoperability through e-commerce platforms. Clients must provide their Personally Identifiable Information (PII) to benefit from services. This is where cybercriminals can use sophisticated techniques to steal user data and achieve their malicious goals. Business professionals must use KYC verification solutions to discourage fraud and guarantee compliance with know your customer & AML standards. This way, experts can also mitigate identity theft and data fraud conveniently.
Gaining Insight into Fraud in the Telecom Industry
Modern-day mobile devices facilitate monetary transactions and facilitate sharing of sensitive data. This is where cybercriminals can interfere and steal critical information to achieve their malicious targets. Hackers can exploit the loopholes in mobile networks to commit payment fraud, identity theft & Account Takeover scams (ATO). The telecom industry has to bear a loss of millions of dollars when criminals use sophisticated techniques to exploit the systems.
Rapid digitization has enabled hackers to use SIM Farms to benefit from free services. With this approach, criminals receive payments and forward messages to random strangers in order to gather PII easily. In case of success, fraudsters use sensitive data for SIM swaps which is a type of ID theft. Hackers target mobile phones to gain access to social media platforms, bank accounts, and e-wallets to receive OTPs.
The Case of T-Mobile Company
A nefarious gang attacked T-Mobile company through SIM swap attacks & code theft. Fraudsters can also use phishing attacks on telecommunication companies to achieve their malicious goals. In a recent case, a gang targeted multiple recipients through large-scale SMS messages that promoted financial aid to Ukraine. During the pandemic, phishing scams became widespread because fraudsters wanted to gain access to sensitive payment details. This raises a challenge for authorities while regulating the telecommunication industry. SIM swapping fraud negatively impacts the industry & its clients. If business experts do not follow the latest AML/KYC compliance, the telecom industry will keep facing fraud attempts. According to the latest standards, experts must perform KYC verification services to discourage fraud and attract genuine clients worldwide.
Detecting & Fighting Scams
Fraudsters can execute SIM swap by transferring user PII to SIM through hacking. This increases vulnerability to misuse of data and also increases the risk of hackers accessing other sensitive data in SIM cards. This can include e-mail or banking details. Hence, telecommunication companies must implement a Risk-Based Approach (RBA) to identify & fight fraud.
After the provision of zero-rate call offer, it became obvious that the sector needed stronger defense mechanisms because the flow of SMS and calls increased by 2500% during the Russian invasion of Ukraine. The introduction of regulatory compliance is critical to detect fraud and ensure fair use policy in the industry. There must be a system in place to observe customer use of telecommunication services. This way, experts can identify & report fraudulent activities effectively. Hence, the significance of KYC verification solutions becomes obvious.
Using International Mobile Equipment Identities (IMEIs)
Nowadays, there are robust solutions available for telecom vendors to monitor suspicious patterns and quickly identify SIM swap fraud. Telecommunication firms that identify red flags in mobile users can successfully discourage fraud attempts. This happens by identifying abnormal activities in vast volumes of online traffic from a specific jurisdiction through smart devices. IMEIs can also help to detect fraudulent behavior that fakes more data consumption in a short time period.
Securing Telecommunication Industry
KYC verification is the procedure of validating user ID credentials. Financial service providers use innovative digital solutions to monitor monetary transactions. The purpose is to discourage ID fraud while keeping an eye on users and vendors. In various jurisdictions, governments encourage businesses to implement KYC protocols along with AML regulatory obligations. This is essential to protect mobile vendors from money laundering & terrorism financing cases. There are some locations in the world where authorities do not encourage the implementation of KYC verification & AML measures, but telecom vendors must execute robust ID verification services to deter bad actors from exploiting the system.
Experts can collaborate with third-party vendors to benefit from KYC verification that has AI & ML support to generate results. AML compliance motivates telecom service providers to cross-check new clients’ credentials against various checklists such as PEPs watchlists. This is critical for deterring high-risk entities from exploiting the system.
The telecom industry and digital service providers face various challenges from cyber criminals, such as reverse-engineered scams. For this reason, the privacy of digital accounts & e-wallets gets compromised by external attacks. Unfortunately, this endangers the market reputation of the industry and third-party vendors.
Business experts can work with verified service providers to streamline identity verification in the telecom sector through KYC verification solutions. The state-of-the-art solution has the support of AI & ML models, which generate high-quality results in real time. Hence, the telecommunication industry can mitigate risk and implement KYC verification solutions & follow AML regulatory obligations easily.