Cybersecurity threats are evolving daily, and a particularly dangerous scam is on the rise: SIM swapping fraud.
In 2023, the Internet Crime Complaint Center (IC3) reported more than $48 million in losses from SIM swapping fraud affecting both individuals and businesses. This type of fraud allows criminals to take control of your phone number, granting them access to sensitive information. A single SIM-swapping fraud attack can result in unauthorized access to personal data, significant financial loss, and long-term damage to your company’s reputation.
SIM swapping fraud targets businesses that rely on SMS-based authentication to secure accounts. In 2024, authentication use cases will account for over 50% of all SMS traffic. The growing reliance on SMS-based user verification increases the risk of SIM swapping correspondingly. However, solutions with built-in fraud protection, such as Plivo’s Verify API, make it possible to mitigate fraud risk with little effort. Here’s how to prevent SIM swapping fraud by following a few best practices to protect personal and organizational data.
What is SIM swapping?
SIM swapping, also known as SIM jacking or the port-out scam, is a type of fraud where cyberattackers transfer a victim's phone number to a new SIM card.
Mobile networks rely on unique IDs embedded in each SIM card to route calls and text messages to the correct device. When a SIM swap occurs, all incoming network traffic, including calls, text messages, and verification codes, is redirected to the fraudster’s SIM card. The fraudster can then access any and all messaging traffic intended for the victim’s inbox.
The main aim of SIM card swapping fraud is to exploit two-factor authentication (2FA) and gain access to valuable information, such as bank accounts, email, and social media platforms. SIM jacking intercepts one-time passwords (OTPs) and security codes, compromising all accounts that use 2FA.
How does SIM swapping work?
SIM swapping commonly occurs by tricking a mobile carrier into transferring a victim’s phone number.
Fraudsters first gather personal details about their target, such as their name, address, or answers to security questions, often through phishing attacks, data breaches, or purchases on the dark web.
The attacker uses this information to contact the victim's mobile carrier, impersonating them and claiming that their SIM card was lost or damaged. The fraudster then requests to port the number to a new SIM card. If the carrier fails to properly verify the fraud, the phone number is successfully transferred.
Once this happens, the fraudster receives all calls, texts, and verification messages meant for the victim.
SIM swapping can also occur through other methods, such as directly hacking a victim’s carrier account and updating their contact information. In some cases, insider threats come into play, where rogue employees at mobile carrier companies facilitate the swap for the attacker.
What is a SIM farm?
A SIM farm is a setup consisting of special hardware and software that manage multiple SIM cards simultaneously.
While SIM farms may be used for lawful objectives, such as testing mobile services or sending bulk marketing messages, fraudsters often utilize them to simplify illegal operations, such as:
- Sending fraudulent texts en masse
- Making fraudulent calls
- Conducting other fraudulent operations across several phone lines
SIM farms enable large-scale fraud by regularly switching between SIM cards and distributing activities across multiple numbers. This makes it challenging for cell carriers and law enforcement to detect suspicious patterns or ban offending numbers. Additionally, they allow attackers to bypass international phone charges and take advantage of weaknesses in SMS-based authentication systems.
A SIM farm typically operates using two key devices: a SIM box and a SIM bank. Here’s how each functions:
SIM box vs. SIM bank
How does a SIM farm work?
Here’s how SIM farms operate to conduct large-scale SIM swapping fraud:
- Acquiring prepaid SIM cards from various carriers to avoid detection by a single telecom provider.
- Integrating a SIM bank to centralize management for countless SIM cards, enabling remote access and automatic SIM switching based on usage patterns or network thresholds.
- Connecting to SIM boxes to handle call routing, send bulk SMS messages, or make large volumes of calls from different numbers without physically handling the SIM cards.
- Switching SIM cards dynamically to avoid detection and prevent any single SIM from exceeding traffic limits or drawing attention.
- Automating international call/SMS routing to bypass local restrictions, preventing the likelihood of detection by telecom providers.
- Monitoring and managing blocked SIM cards or those with connectivity issues to maintain a steady flow of fraudulent activity.
How does SIM swapping fraud affect businesses?
SIM swapping fraud poses serious risks for businesses, causing operational and reputational harm. Some key effects include:
- Security breaches: SIM swapping can bypass SMS-based 2FA, making businesses vulnerable to unauthorized access.
- Compromise customer data: Hackers can obtain sensitive customer information, leading to identity theft and data breaches.
- Reputation damage: A single SIM swap attack can erode customer trust, leading to bad publicity and loss of credibility.
- Financial loss: Fraud-related costs include direct financial theft and indirect expenses, such as customer compensation and legal fees.
- Network infiltration: Attackers can use SIM swapping to breach internal systems, exposing critical business data and intellectual property.
How to detect a SIM swap attack
Detecting a SIM swap attack early is crucial to mitigating its impact. Here are some key signs to watch for.
- Sudden loss of phone service: This could indicate that your SIM card has been deactivated and transferred to another device.
- Unusual account activity: Unauthorized logins or notifications from banks, social media, or email accounts could mean your phone number has been compromised.
- Inability to access accounts: If you can’t access services that use SMS-based authentication, such as online banking, it’s a strong indicator that your phone number has been hijacked.
- Unrecognized alerts from your mobile carrier: Notifications about changes to your SIM card or account, such as a new device activation you didn’t initiate, are red flags of a potential SIM swap.
How to prevent SIM swapping
Protecting your business from SIM swapping fraud requires vigilance and strong security measures. Here are some best practices to safeguard your accounts and data:
- Set a PIN or passcode with your carrier: Most carriers offer the option to add an extra layer of security. Use a strong, unique code that makes it difficult to guess, as this will be required for any changes, including SIM swaps.
- Monitor your accounts regularly: Watch out for anything unusual with your bank accounts, email addresses, and social media accounts. Ensure notifications are set up for logins from new devices or changes to account information.
- Be cautious with public information: Fraudsters often exploit personal data from social media to answer security questions. Limit the amount of personal information you share publicly.
- Review and secure account recovery options: Ensure backup emails, phone numbers, or security questions are robust enough to prevent attackers from easily exploiting them.
Prevent SIM swapping with Plivo
A strategic combination of technology and proven methodology can deduct SIM-swapping attacks and protect your business from becoming more vulnerable.
With Plivo, you can validate phone numbers without interrupting the user flow. So, even when a SIM swap has occurred, the perpetrator doesn't have an opportunity to capitalize on it.
Use Plivo’s Lookup API
The Plivo Lookup API, with its phone number validation and real-time analytics features, provides companies with the means to detect SIM swaps. You can improve your risk management with a reliable API call that will assess the phone number and return critical information about:
- Current network and original network details
- Roaming status and network changes
- Risk scores and unusual patterns that may indicate fraud
Checking these analytics can indicate any suspicious activity that occurred recently for a particular number, raising red flags.
Plivo’s pattern-based alerts
Even if the phone number is verified, there is a chance of fraudulent and illegal activities. Lookup includes built-in Fraud Shield, an AI-driven algorithm that helps monitor your messaging patterns, establish message thresholds, and send automatic alerts if an unusual pattern emerges. When a SIM swap is detected, you can put the account on temporary hold.
When discussing pattern-based alerts and how it helps detect SIM swaps, here’s what happens:
Spikes in traffic
A SIM swap fraudster usually tries to quickly take advantage of the victim’s phone number before the fraud is detected. This often involves sending or receiving many messages in a short amount of time to authorize access to accounts (e.g., bank logins, resetting passwords, or verifying transactions). This would cause an unusual surge in SMS traffic — far more than what a normal user would generate.
Low conversions
When a SIM swap happens, the original owner loses access to their phone number, but systems still try to send OTPs to the legitimate phone number. However, because the fraudster now controls the SIM, these OTPs fail to reach the original user, and the system may detect low conversion attempts and flag as suspicious.
Fraud thresholds for message control
To mitigate risks, you can use fraud thresholds for message control. If the threshold is exceeded, you have customizable options:
- Block and alert: Messages are blocked for 12 hours after a breach, and an alert is triggered.
- Alert only: An alert is sent, but messages are not blocked.
Plivo's dynamic controls will notify you of any unusual traffic patterns or surges when customized.
Protect your business with Plivo
Plivo's Lookup API, in conjunction with pattern-based alerts, can be a powerful tool for detecting fraudulent SIM swaps. Doing so can prevent your business from being vulnerable to further damage or associated risks and take needed measures.
Safeguarding your organization from SIM-swapping fraud is vital for protecting consumer security and retaining their trust. With Plivo’s advanced number validation solutions and Fraud Shield, you can secure critical accounts and improve overall communication security.
Contact us today to request a trial and protect your business from SIM swapping and other cybersecurity threats.
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