Gaps in registration and verification processes paving way for increased SIM card frauds
The SIM card subscription fraud, constituting about 40% of all telecom frauds globally, has resulted in a loss of ₹3,600 billion annual loss for the telecom industry, revealed a joint study by Telangana Cyber Security Bureau (TGCSB) and Indian School of Business (ISB) Institute of Data Science and the Centre of Excellence for Cyber Security.
The study utilised subscriber data from Customer Acquisition Forms (CAFs) stored across all telecom service providers. “As many as 1,600 phone numbers from various police stations belonging to criminals reported by the people across Hyderabad and Telangana were obtained and real-time analysis of the data from these PDF-format CAFs was extracted using AI models,” said their official release.
According to the study, 64.5% of Indian consumers prefer digital KYC (Know Your Customer) for SIM registration, with Aadhaar being the preferred ID. Notably, 89% of alternate numbers provided are not linked to Aadhaar, indicating a significant gap in verification processes.
Meanwhile, an extensive analysis of SIM registration policies in 160 countries was conducted to benchmark global best practices for insights for enhancing local protocols.
The study also highlighted the vulnerabilities of OTP-based authentication and identified irregular practices by Point of Sale (POS) agents. It further revealed the gaps in real time subscriber authentication and ineffective OTP-based authentication. It was observed that often the alternate numbers used for authentication were linked to other criminals.
Data analysis revealed that the fraudsters use counterfeit or outdated Aadhaar cards with children’s images to obtain SIM cards for malicious activities. To tackle this menace, the study recommends strengthening online identification, improving electronic verification processes and increasing public awareness.
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