The Ultimate Guide to Prevent Fraud in 2024 2024

What does it feel like when you open your monthly bill and find an SMS charge of millions of dollars 💸 

But how? Simple: SMS pumping fraud. This is a form of cybercrime in which attackers create a huge fraudulent volume of SMS traffic, resulting in inflated business charges. 

This fraudulent activity not only affects finance but also makes it difficult to tell the difference between real SMS marketing and SMS marketing abuse. However, a better understanding of SMS pumping enables businesses to implement prevention strategies to avoid a huge financial loss. 

For your convenience, we present you with a blog 📜 completely dedicated to the ultimate guide to prevent SMS pumping frauds. 

What Is SMS Pumping?

SMS pumping is a type of text message fraud in which attackers generate a large volume of artificially inflated traffic by tricking businesses into sending OTP (one-time passcode) or links to fake numbers through SMS.

It is also known as Artificially inflated traffic because it involves fraudsters creating fake volumes of SMS messages. In this SMS toll fraud, dishonest Mobile network operators (MNO) team up with the fraudsters and gain revenue from the expensive SMS charges taken from businesses. 

Sometimes, the attackers even hack into Mobile network operators (MNOs) and re-route calls. This is why the chances of messages being sent to premium-rate numbers or countries are higher in this SMS spamming. 

A real-time example was when Elon Musk stated that Twitter lost approximately $60 million a year because of the bot accounts used by the 390 telcos to pump A2P SMS.

For instance, if the charge for sending one OTP is $0.50, and attackers trick a business into sending 15,000 OTPs, the business ends up with a $7,500 SMS bill. The money from this scam is then divided between the fraudster and the mobile network provider involved in this SMS fraud. 

Examples of SMS Pumping Fraud

While businesses use legitimate SMS blast campaigns for marketing, fraudsters negatively use similar SMS capabilities for unethical purposes. For frauds like pumping SMS traffic,  they especially use OTP and Web forms to attack.

1. SMS OTP Fraud

The most common example of SMS pumping is SMS OTP Fraud. In this case, the attacker’s primary target is banks since they provide convenient methods on their apps to send one-time passcodes for login attempts. 

This becomes a treasury for fraudsters. These attackers collect all the needed credentials from the dark web and use SMS-pumping bots to attempt a large number of logins on the bank’s website or app, subsequently charging the bank an excessive amount of SMS costs.

As a result, the targeted company will incur thousands or millions of dollars in SMS charges for high-cost internal SMS. 

2. Web Form Attacks

Web form attacks involve SMS traffic manipulation where attackers enter fake, high-cost numbers into website forms, typically in the Phone Number field for new users. Businesses that require phone numbers on their forms are particularly vulnerable to this type of fraud.

In these attacks, businesses often don’t realize they are being targeted. They assume that the numbers entered are from genuine potential customers.

However, they end up paying for SMS messages sent to expensive, premium-rate numbers, resulting in unexpected and high charges.

How Does SMS Traffic Pumping Work?

To pump SMS traffic, fraudsters may exploit SMS short codes and trigger the business forms to send SMS to a wide range of numbers. All these numbers are premium-rate numbers that cost higher fees when messages are sent to them. 

For this, they require numbers owned by mobile network operators (MNOs), which is why this SMS traffic pumping involves a team of fraudsters and MNOs. The alignment with the network operator allows fraudsters to exploit numbers controlled by the operators.

Fraudsters then use automated systems to send thousands of short message services to high-cost countries or destinations. This could involve filling out the new sign-up form with numbers on business digital sites or requesting verification codes. 

Each SMS sent as OTPs, verification, or sign-up codes incurs significant costs for the business. This leads to millions of dollars in fraudulent SMS charges that should be paid to the MNOs.  

On the other, the MNO shares a certain amount of revenue earned from SMS traffic pumping with the fraudsters as per their agreement. 

What Causes SMS Pumping to Occur?

A report co-authored by Enea reveals that Artificially Inflated Traffic (AIT) is widespread within the ecosystem. In 2023, attackers sent approximately 19.8 billion to 35.7 billion fraudulent SMS messages, which led to a substantial cost of over 1 billion USD. What causes this? 

Multiple reasons cause the SMS pumping. However, the primary concern is the lack of a strong verification. Apart from that, these are the probable causes of SMS traffic pumping:

• Collusion with dishonest MNOs: Fraudsters alone are unlikely to succeed in this SMS traffic-pumping fraud. They often collaborate with dishonest Mobile Network Operators (MNOs) to succeed in SMS pumping. These dishonest MNOs share the profit from artificially inflated traffic. 

• SMS sign-up options: Fraudsters take advantage of businesses that use SMS for customer sign-ups. They use these forms for SMS fraud with thousands of fake numbers. 

• The exploitation of free services: Easy free access to request OTPs, SMS notifications, and verification codes lets the fraudsters create unauthorized traffic without barriers of costs. 

• Insufficient monitoring: A business that does not adequately monitor SMS or OTP traffic might fail to avoid fraudulent activity, unusual patterns, or attempts at SMS spoofing.

What are the Methods to Identify SMS Pumping Attacks?

There are multiple ways to identify if you are under the SMS pumping attacks. To identify suspicious activities, you can follow these methods: 

1. Check the Location of Numbers Asking for OTPs

Monitor the geographical location of any numbers asking for the passcodes. Legit customer requests often occur from common locations. If you observe any of the phone numbers requesting from unusual locations, this could be a red sign.

The similarity of the locations of multiple verification codes is another signal that someone is trying to attack you with SMS pumping. 

2. Similar Number Patterns

There could be a probability of spamming SMS attacks if the OTP requests are from numbers with a similar pattern. Automated tools commonly use these patterns to fill out digital web forms and create fraudulent traffic. 

3. Traffic With 0 Conversion Rate

One common result of the SMS pumping attack is that your business will have no conversions. Fraudsters send tons of requests, and businesses provide them with PIN codes with the expectation of interacting with genuine customers. 

But this ended up having no results. You need to pay attention to the average SMS conversion rates. 

4. Unexpected Volume with Traffic Spikes

If you notice a sudden, unexpected spike in SMS traffic, it’s time to investigate. Attackers often use A2P (Application-to-Person) software to flood systems with a large number of SMS requests at once.

To catch these attacks early, use monitoring tools that can track unusual changes in SMS traffic. If you detect something out of the ordinary, it might be an SMS-pumping fraud. The sooner you act, the better you can protect your business.

What Are the Best Ways to Prevent SMS Pumping Fraud?

As we talked about the problems that can lead to SMS pumping fraud. Let’s also state the point to resolve all those problems with the common prevention methods: 

1. Set a Blocking List

As a business, you know the location of your customers’ phone numbers. This allows you to set a blocking list for high-cost countries’ numbers that can be the potential numbers to be used by fraudsters. This limits the attacker’s ability to send messages in high-cost countries. 

Regions with low telecommunications development are most likely to be targeted in fraud activities. You can team with your MNO or use any number-filtering software to build a block list of countries. This list helps you prevent the higher risk of SMS pumping.

2. Linking Accounts

Whenever fraudsters attempt SMS spamming or any text message fraud, they access multiple accounts from a single device. You need to assign a unique identifier for each visitor who is seen using more than one account with one device. 

Detecting accounts linked to a single device is a sign of suspicious activities. You need to start taking action to implement additional security to prevent SMS toll fraud.

3. Constant Monitor and Educate User

Constant monitoring of SMS traffic is important to identify any unusual patterns. This will allow your business to be aware of sudden spikes in SMS requests. Whether it’s the unusual location, numbers, or activity, constant observation identifies and investigates the sources. 

Additionally, educating your customers about SMS compliance and security best practices can help prevent SMS pumping, SIM swapping attacks, and other cybercrimes.

If users are aware that trusting unknown users can result in smishing, they will avoid sharing sensitive information with scammers. Providing users with training lets them create a strong defense against these SMS frauds. 

4. CAPTCHA or Detect Bots

You may also have proven yourself as a human multiple times while signing forms or asking for codes. CAPTCHA is designed to detect whether the user is a legitimate human or bot. In most cases, attackers use bots to enter the number and ask for a verification code. 

Mobile Ecosystem Forum stated that after they recommended the use of Recaptcha, the monthly SMS usage decreased from 300k to 30k. This led to the conclusion that all of the other extra SMS were artificially inflated traffic. 

After you implement CAPTCHA, it slows down the attacker’s speed so that they can no longer use bots and instead enter the numbers manually. The detection of bots forces the attackers to be less prominent and less effective. 

5. Limit in SMS 

In SMS pumping fraud, bad actors often send numerous requests within the same timeframe. To avoid this, you can set an SMS limit if a large number of OTPs are being sent to one device within the same timeline. 

Limitation in SMS requests lets the business slow down and deter cybercriminals. To balance with the genuine users, you can add verification methods whenever visitors exceed the request limits. 

SMS Pumping Prevention Tools

SMS traffic pumping prevention can not rely on one software or tool. Instead, it involves a combination of tools and prevention measures. Each tool is designed for specific tasks, such as identifying number validation, limiting SMS, and built-in fraud detection. 

Here are some tools that help prevent SMS pumping attacks: 

1.  Twilio Verify

It is a tool powered by Twilio for preventing SMS fraud and scams. The software validates the users’ phone numbers before the business sends any OTPs or verification codes. 

Proper number validation lets the system filter and only send one-time passcodes to legitimate users, detecting fraud in real time. 

Twilio Verify also provides multichannel verification. It solves complex challenges, such as device-specific capabilities, carrier regulations, and other communication variables. These features help deliver SMS codes to genuine customers successfully and eliminate unnecessary loss. 

Moreover, Twilio offers a dedicated SMS pumping protection system. This system analyzes your SMS traffic’s current and historical traffic to identify unusual patterns. If any unexpected fluctuations occur in a specific location, the system automatically blocks messages to phone numbers with suspected fraud. 

2. Cellusys

Cellusys is an effective tool that creates and delivers a system to increase the security of your mobile network. This software’s SMS firewall secures and monetizes the business traffic properly which protects it from SMS vulnerabilities. 

Cellusys categorizes messages according to the content,  filters suspicious SMS traffic, and blocks those numbers. The Tier 1 solution offers robust security against SMS fraud, spam, and other cyber threats.

 In return, you will see a reduced subscriber churn rate with affordable customer service costs. 

3. Soprano Connect

Soprano Connect is a CPaaS (Communications Platform as a Service) that offers a comprehensive range of features for the protection of clients and messages. 

This platform offers fraud detection with a prevention feature and detects all potential fraudulent mobile numbers. You can easily configure parameters and set a filter for any number. 

This flexibility makes it a prevention tool that safeguards communication channels from SMS-pumping attacks. 

Conclusion

SMS pumping is a serious form of cybercrime that can cause businesses excessive financial loss. The exploitation of SMS systems involves artificially inflating traffic through OTP or web form attacks, which negatively affects company growth. ⬇️

It becomes crucial to remain vigilant and implement proactive measures like monitoring SMS traffic, setting blocking lists, and using powerful tools to prevent cybercrimes. By implementing these strategies, businesses can safeguard themselves from related cybercrimes. 🤗

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