How SMS Fraud Works and How to Guard Against It

🌈 Abstract

The article discusses how SMS fraud works and how app developers can guard against it, covering topics such as premium phone numbers, SMS fraud techniques, and strategies to prevent SMS fraud.

🙋 Q&A

[01] How SMS Fraud Works and How to Guard Against It

1. What are premium phone numbers and how can they be exploited for SMS fraud?

• Premium phone numbers are numbers that charge a fee (typically tens of cents) for calls or SMS messages to them.
• Owners of these premium numbers may offer legitimate services, but the numbers can also be exploited by bad actors to profit from SMS fraud.
• A bad actor can obtain premium phone numbers and find ways to have web services send thousands of SMS messages to these numbers, causing the web services to lose money while the bad actor profits.

2. What are some strategies app developers can use to guard against SMS fraud?

• Obfuscate the endpoint used to send SMS messages if using a third-party authentication service.
• Block requests from suspicious IP addresses, such as those originating from cloud providers or fraudulent ISPs.
• Implement IP-based rate limiting on the SMS sending endpoint.
• Block phone numbers after a small number of SMS attempts to limit abuse.
• Require users to solve a CAPTCHA before sending an SMS.
• Identify and block known premium rate phone numbers.
• Only send SMS messages to paid user accounts.
• Block mobile network operators with a high number of fraudulent users.
• Use WhatsApp instead of SMS for messaging, as WhatsApp is free.

3. How could Twilio, a dominant SMS API provider, help address SMS fraud at the source?

• Twilio has data on fraudulent phone numbers and carriers across its user base, so it is in a unique position to quickly block bad numbers and carriers before they become a problem for multiple web services.
• Twilio could offer SMS fraud protection as a free or paid add-on to its standard APIs, leveraging its ability to detect invalid phone numbers using Silent Network Auth.

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