The sharing of personal information online has increased because of the increased use of cell phones. From the convenience of your own home, most routine actions, such as providing information over the phone, opening a bank account, and placing food orders, can now be done. The spread of identity fraud and financial schemes has been helped by the telecom sector.
Identity fraud, financial fraud, account takeover, and more are just some of the assaults that can be caused by a simple mobile network vulnerability. According to a report by the Communications Fraud Control Association, 2.22% of global telecom profits could be lost to fraud by the end of the year.
The installation of KYC policies in the telecom industry is more important than ever in order to reduce these figures. Let’s look at the many types of telecom fraud.
What are the Top Telecom Frauds?
Telecom fraud is the acquisition of sensitive information, such as identification card numbers or bank account data, from either a service provider or its consumers through the use of telecommunications services. Telecom fraud includes Phishing, smishing, SIM exchange fraud, and International Revenue Sharing Fraud.
The Current Threat Scenario
Over the last five years, telecom fraud has gone up. The amount of money that was lost due to scam calls was more than 10 billion dollars. By 2020 the figure had risen to over 20 billion dollars. Risk awareness and investment in automated digital identity verification systems will be important in the future as the fight against fraud in this industry appears to be never-ending.
Phishing and Smishing Attacks
The statements pose a danger to the telecom sector as a whole. The termvishing is a combination of the words voice and phishing. In a similar way, a scam artist uses their voice to lure the victim into giving up their information. A bank representative is an example of an authority figure that is impersonated by a phisher. The victim is required to give their legitimate ID, name, address and other private information to establish their identification. The thief might sell the information on the dark web or use it to perpetrate other financial scam.
Smishing attacks use text messaging. A smishing text message can bait a victim into revealing personal information through a link. Over 240,000 victims of phish, smishing, and vishing attacks were reported to the FBI’s Internet Crime Complaint Center in 2020.
We are going to look at a step-by-step example of how a single data breach in the telecom industry might have devastating effects.
Stage 1 – Data Breach
Mega-scale hacks such as the one at T-Mobile become more common as exposure to more data becomes normalised. sensitive information such as social security numbers, driving licences, phone numbers, addresses, and account PINs were exposed as a result of the data breach. More than 50 million T-Mobile users have been exposed to a greater threat of sim swap fraud.
Stage 2 – SIM Swap Fraud
Once a fraudster has access to another person’s password, they can easily request that the phone number’s sim card be swapped to a new one. They can get control of the victim’s phone in a matter of minutes. This is known as sim switch fraud. The thief can take control of your internet accounts by acquiring access to any two-factor authentication code that is sent via text messages.
It might result in irreversible data loss and possibly identity theft if the telecom operator doesn’t have adequate KYC procedures.
By 2020, the United States will have had more than 100 million dollars stolen. Action Fraud, the UK’s reporting centre for fraud and cybercrime, says that there have been more reports of sim swap fraud in the UK in 2019.
Stage 3 – Identity Theft
This leads us to the most catastrophic stage. Identity fraud can be perpetrated by criminals without effective ID verification processes. An identity thief can destroy the victim’s credit history, disqualify them from getting loans and state assistance, deplete their bank accounts, and even wrongly arrest them. With KYC compliance, telecom firms can easily find identity fraudsters. During the initial step of account opening, KYC verification is used to verify the customer’s identity. Identity thieves won’t be able to impersonate the victim if KYC verification is used with a facial recognition system.
Identity Verification is the Way Forward
KYC verification is very important in the telecommunications industry. It makes it possible for a corporation to prevent fraud by verification of ID papers. An effective ID verification system helps a telecom company make sure that the client is who they say they are and not an imposter. Telecom operators can use face match, 3-D liveness detection and anti-spoof technology to assess the risk associated with clients through different identification checks.
Huge volumes of data have been exchanged because of the increased use of smartphones. Customers must enter their personal information into online banking applications and give their phone numbers to conduct routine operations.
The telecom sector is concerned about fraudulent activities which are caused by a lack of identity verification. The business is plagued by identity fraud and financial crime.
How the Telecom Industry Can be Secured
The Know Your Customer process is used by banks and other financial institutions to verify the identities of clients. Keeping a close watch on both consumers and telecom service providers is one of its goals. Governments support KYC checks in numerous sectors as part of Anti-Money Laundering rules and as part of attempts to prevent mobile carriers from unintentionally becoming a source of money laundering and terrorist financing. In places where KYC procedures are discouraged, telecom carriers have to put in place rigorous identity verification mechanisms.
Online identity verification service providers use face recognition and other facial recognition technologies.
The identity of telecom firms’ clients is being verified using thousands of Artificial Intelligence (ai) algorithms. KYC compliance requires businesses to do background checks on their clients to make sure they are not related to politically exposed individuals and to check for their inclusion on global sanction lists.
Online identity verification service providers such as IDcentral use technology such as facial recognition and artificial intelligence to confirm the identities of telecom company clients.
How IDcentral can help:
Cybercriminals pose a threat to the telecom sector and communication service providers, making it difficult to combat reverse-engineering schemes. Online accounts and bank wallet are more vulnerable to be hacked. At stake is the integrity of service providers.
IDcentral’s identity verification services allow mobile service providers to verify clients’ true identities before accepting them. Our solution can be used with more accuracy in less than a second. Telecommunications service providers can use risk assessment reports to screen for high-risk consumers.
Learn more about our Identity Verification and Customer Onboarding Solutions
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Sumanth Kumar is the author of a Security Bloggers Network post. The original post can be found at: https://www.idcentral.io/blog/regulatory-compliance-in-the-telecom-industry