A SIM card is a valuable piece of electronic chip, which is the ultimate reason why fraudsters are after it. One of the reasons is SIM card cloning, a type of fraud that lurks in many unsuspecting users in telecom networks.
This particular fraud is a growing problem in many digital services, and the FBI’s Crime Report can easily support this claim. This report made in 2023 states that about more than $48,798,103 in losses were caused by port jacking and SIM cloning scams.
In telecom services, securing users from any unlawful schemes is a must to ensure they can access networks and services worry-free. With that said, just how threatening could cloning a SIM card be?
What is SIM card cloning, and how does it work?
In general, SIM card cloning meaning is harmless. But in this context, it is an act of duplicating a SIM card from the original one, often being done to steal access to the victim’s account and one-time password (OTP).
What makes this SIM duplication technique threatening is the fact that it’s not something that requires a massive amount of hard work. Here’s the explanation on how fraudsters perform SIM cloning fraud:
- First, they need to gather essential information about the victim. To do this, they can use malware or social engineering techniques.
- Once a victim falls into their trap by unintentionally giving away the essential information, they use that information to deceive a mobile phone operator.
- The fraudster will claim that their SIM card is missing or broken, hence needing a new SIM card with the victim’s phone number. The mobile phone operator simply ports the number to the new SIM card as they find nothing suspicious.
- Once the process is done, the fraudster can now receive the OTP to change the account’s login credentials in order to access it.
So, what happens if someone cloned your SIM card? To put it simply, you will realize that you have lost the phone’s network since the new SIM card has taken its place. Later, you will also find out that the access to your accounts is no more.
The Impact of SIM Card Cloning on Telecom Providers
Let’s say that your telecom network services are at a serious risk of fraudsters performing SIM cloning fraud on your users. What are the impacts if this ever-growing scheme keeps occurring to them?
1. Reputational Damage
The most obvious impact here is reputational damage, because as a service provider, you are supposed to protect them at all costs. People can’t trust a telecom provider that fails to secure its users from any kind of fraud.
The burden of having reputational damage is also about how hard it is for telecom providers to recover from such damage. Your now-bad reputation can also make it harder to get new users to use your services.
2. Financial Losses
In order to keep the telecom service going, you need to maintain your stable income. However, the impact of SIM cloning is that it can disrupt your income. At worst, you may have massive financial losses.
This is because users will no longer use or subscribe to your telecom services, thus beginning to look for much more secure alternatives. So it’s not just them who will face the financial losses, but also telecom providers.
3. Loss of Customer Trust
In any kind of business, customer trust is something you need to uphold in order to maintain customer retention. It can be maintained by simply having secure and top-notch quality telecom network services.
However, failing to protect the telecom services against SIM cloning fraud can impact how your users trust you. Having a loss of customer trust means you will potentially lose many users who used to trust your services.
4. Increased Security and Operational Costs
On top of having a financial loss, you will also face rising costs from your security measures and operations. How exactly can the impact of the SIM duplication technique add further costs to telecom providers?
- In the context of security, telecom providers will need a budget to strengthen their security as a response to the fraud.
- In the context of operation, telecom providers will deal with complaints from customers who have suffered from the fraud.
5. Legal and Regulatory Scrutiny
If that’s not enough, your telecom network services are also at risk of facing legal issues, mainly because you fail to comply with the regulations. These regulations exist solely to ensure companies protect their customers’ personal data.
Since the goal of SIM card cloning is to steal users’ personal data and accounts, this fraud can bring telecom providers to lawsuits. As a result, you may have even more financial losses from regulatory scrutiny.
6. Rising Fraud and Cybercrime Risk
By knowing how vulnerable your telecom network services are, other fraudsters will continue to attack your business. This can put your services at risk from further fraud techniques and cybercriminal activities.
For example, fraudsters can extort telecom providers by threatening to release users’ personal data and accounts. They can also try to access the network services illegally by intercepting telecommunications.
Why Traditional Security Measures Aren’t Enough
Many telecom providers actually have security measures in hope of protecting their users from fraud. However, their security is simply not enough because of a few reasons:
- The issue with SIM cloning is more than just a security failure. This fraud still requires personal data that can be gained by social engineering methods.
- The verification method relies on phone numbers and SMS to receive OTP. Fraudsters can intercept the messages, allowing this fraud to succeed.
- Much like other fraud, SIM cloning is an ever-growing problem. It means there is always a way for fraudsters to trick operators to perform this fraud.
How Keypaz Detects and Blocks SIM Cloning in Real-Time
So, how to really prevent SIM duplication or card cloning? Fortunately, Keypaz has an answer to that question. By using Keypaz’s device intelligence, you can detect and block cloned SIM cards, ensuring only legitimate users can access telecom services.
The device intelligence has real-time protection that allows monitoring changes in SIM card identifiers to detect potential SIM swap activities. Once detected, it can trigger alerts and responses to prevent fraud.
With Keypaz, you can ensure that your users can access telecom services without a fear of their SIM card getting cloned by fraudsters. Prevent SIM card cloning and secure your telecom network services with Keypaz now!