Telecom fraud costs customers and businesses $29 billion a year, and experts predict this number will skyrocket in the next decade. SMS fraud, in particular, can have a detrimental impact on phone users. Hackers can send messages, which look like legitimate texts, and encourage people to hand over their personal information, for example. Here are some of the most common types of SMS fraud.
Every year in the United States, almost 4.5 billion spam texts end up in phone inboxes. Much of this spam is annoying, but it's harmless. It serves no real purpose, other than to advertise a product or service few people want. However, hackers can use spam messages to induce people to hand over their personal data.
Spam messages, for example, might ask the recipient to reply with his or her name, address or, worse, bank details, in order to receive a prize. People fall for this scam all the time. In other instances, spam texts contain a web link that redirects the recipient to a page where he or she enters personal information in exchange for a service.
2. Grey Routes
Cequens recently wrote about how grey routes allow marketers to send bulk text messages at a fraction of the cost, usually via P2P channels. The problem with this delivery method, however, is that it can be insecure and expose personal information to the wrong people. This is because messages move through private networks that lack security. As a result, fraud can occur.
3. SIM Farms
Like grey routes, SIM farms allow businesses to send low-cost marketing messages to customers. However, they utilize unsecured delivery methods and could expose personal information to fraudsters.
SIM farms are the second-costliest type of SMS fraud after spam, according to research.
4. SMS Phishing
SMS phishing is a social engineering technique where the sender of a message pretends to be someone that the recipient knows -- usually someone in authority, like a bank or employer. The sender will exchange texts with the recipient and then ask him or her to send personal information such as passwords or bank details.
People often associate phishing with email, but recent research shows that 48 percent of phishing attacks happen on mobile devices.
5. SIM Swap Fraud
SIM swap fraud is more complicated and less common than phishing, but it can have the same devastating ramifications. This type of scam exploits two-factor authentication -- where a user of a particular online service needs to confirm his or her identity via text. Hackers will port the user's phone number to another SIM and intercept any passwords and personal information sent via SMS.
6. SMS Roaming Concept
Fraudsters can now infiltrate someone's text messages if he or she connects to a network in a foreign country -- a process called "roaming." Instead of connecting to the intended operator in the visited location, organized criminals can steal personal data.
7. SMS Originator Spoofing
SMS originator spoofing happens when someone takes on a new identity and tricks a phone user into thinking that a text message is legitimate. These texts look like they are from a trusted friend or family member, but they are not.
These are just seven types of SMS fraud that trick mobile users. The consequences can be destructive -- victims can lose money, jeopardize their business reputation, and expose personal and financial information to hackers.