SMS-es Can Cost Your Business In More Ways Than You Think!

Text messages have been a major channel of communication between companies and their client base for decades. Even before the radicalisation of the internet and the massive social media boom, companies have used SMS as a primary marketing and communication pathway with their clients. With time, sms also became a Multiple Factor Authentication (MFA) tool for user authentication. It was easy to implement from the business side because that communication channel they were using anyway for communication and updates to customers.

However, hackers have smartly leveraged this pathway and with the access to the right tools, they successfully start extracting sensitive user credentials through text messages and SMS-es. What may seem like a harmless SMS to the user, may have the potential to turn into a massive hacking hazard.

According to research by MobileSquared, a leading mobile market research company, SMS-es have around 99% open rate, with over 90% of messages being opened within the first three minutes. Another report by MessageDesk revealed that the average response rate of SMS messages can be close to 45%. With the widespread usage of smartphones, SMS frauds have become more and more popular among cybercriminals since it gives them access to confidential financial and personal data without needing to break into a computer system or network's security. 

Let’s take a look at 3 common types of SMS fraud to increase awareness and take action in case of an emergency:

1. SMS Phishing

SMS Phishing (also known as “Smishing”) is one of the most common and prevalent forms of phishing attacks. Hackers and fraudsters send malicious phishing links to users’ mobile phones with the help of text messages. The text messages are mostly click-bait which can lead to disastrous consequences on being clicked.

In 2022, companies in the USA lost $44 billion to smishing frauds. Fraudsters create SMS links that look legitimate, ushering people to click on the links. Although the security departments in most companies have been alert and continue to provide necessary training to employees, SMS phishing has been at an all-time high and continues to accelerate every year.

2. SMS Traffic Pumping

SMS traffic pumping, also known as Artificial Traffic Inflation, is one of the hardest forms of SMS scams to detect. Hackers have been leveraging phone number input fields to generate a very high volume of SMS traffic in the form of One-time passwords (OTPs), download links, offers etc. Usually, these messages are controlled by a specific Mobile Network Operator (MNO).

Hackers send high volumes of messages to a large number of people and share a portion of the generated revenue with the MNO. SMS pumping can be hard to detect, making it a popular mode of fraud in recent years. And once companies realize this attack, they already lose thousands of dollars in telecommunication bills.

3. Access Hacking

As the name suggests, access hacking refers to the process of forcefully gaining access to the credentials of a third-party provider in order to acquire access to apps, websites, devices etc.

When a messaging orchestration platform is the intended victim, the costs of access hacking can be disastrous. First off, they frequently contain a wealth of important client data. Second, when scammers are within a messaging platform, they can send smishing SMS-es, misdirect customers, and steal money rapidly and in large quantities by using the authentic sender number and capitalizing on the audience's confidence.

Ditch SMS-based Authentication and OTP | Switch to Passwordless with SoundAuth

Companies that use mobile communication have a duty to safeguard both themselves and their customers. While teaching end users how to spot mobile fraud schemes is crucial, it is insufficient on its own.

Switching to an authentication parameter that is independent of passwords and OTPs can help companies easily navigate their way around such fraudulent activities. FIDO Alliance has designed a password-free authentication standard, known as Passkeys. Passkeys use a user’s biometric identity (in the form of a fingerprint scan. Face ID etc) to be an alternative authentication parameter, completely removing the need for passwords and OTPs. Businesses that opt for Passkeys ensure a phishing-resistant login for their clients. Moreover, logging in through Passkeys can be highly effortless for users, helping companies improve their annual yearly volumes.

Passkeys solve all three major problems associated with SMSes that we discussed in the above section. Since Passkeys closely map your biometric and device with your account and biometric data and that neither can be shared or leave the device, hackers can not have access to your account even if they share a phishing link. Passkey has in-built MFA, first through biometric verification and second verification based on signing a challenge through the private key that always stays on the devices, so businesses can go away with SMS OTP based MFA. Passkeys also prevent Access Hacking because private keys never get stored on the server and can not be accessed by hackers.

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Interested to know how Passkeys can help your company and protect your clients from being victims of fraudulent activities? Sign up with us at SoundAuth.com and book a free demo to know more!

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