The digital age has brought numerous advancements and conveniences, but it has also introduced new forms of cyber scams and fraud. One particularly insidious type of telecom fraud is SMS pumping, also known as International Revenue Share Fraud (IRSF). This blog post aims to provide small business owners, startup founders, IT decision-makers, and legal professionals with a comprehensive understanding of SMS pumping, including its mechanics, real-world case studies, and effective mitigation strategies.
SMS pumping (IRSF) is a type of telecom fraud where attackers exploit the SMS delivery and billing process to generate revenue. The fraudsters target businesses that use SMS services for customer authentication, notifications, or marketing. By triggering a high volume of SMS messages to premium-rate numbers they control, attackers can significantly inflate business costs while profiting from the fees collected from these premium numbers.
In 2020, Stripe, a renowned online payment processing company, fell victim to an SMS pumping attack. The attackers exploited Stripe's SMS-based 2FA system by using automated scripts to generate numerous authentication requests. This triggered a large number of SMS messages to premium-rate numbers controlled by the attackers. The method involved creating fake accounts or using compromised accounts on Stripe's platform to flood the system with multiple 2FA SMS requests. By directing these messages to premium-rate numbers, the attackers were able to generate substantial revenue from the fees collected. This resulted in significant costs for Stripe due to the high volume of premium-rate SMS messages. Although the exact financial impact was not disclosed, such attacks can lead to losses ranging from thousands to millions of dollars, highlighting the severe implications of SMS flooding on financial platforms.
Industry experts have voiced concerns about the growing threat of SMS pumping, particularly for small and medium enterprises (SMEs).
"SMS pumping is a growing concern for businesses of all sizes, but particularly for small and medium enterprises, due to the potentially devastating financial impact." — Robert Cochran, Bawn's Chief Solutions Officer
To protect your business from SMS pumping, consider implementing the following strategies:
Restrict the number of SMS messages that can be sent per user or per minute. This can help mitigate the impact of automated scripts generating a high volume of SMS requests.
Implement systems to detect unusual patterns in authentication requests and block suspicious activities. Machine learning algorithms can be particularly effective in identifying and responding to anomalies in real-time.
Encourage the use of alternative multi-factor authentication methods, such as app-based authentication or hardware tokens, which are less vulnerable to SMS pumping attacks.
Regularly monitor and audit your SMS traffic for signs of suspicious activity. Set up alerts for unusual spikes in SMS requests and take immediate action if any anomalies are detected.
Educate employees about the risks of SMS pumping and train them to recognize potential signs of fraud. Awareness is a crucial first step in preventing attacks.
As cyber scams and fraud continue to evolve, businesses must remain vigilant and proactive in their cybersecurity efforts. SMS pumping poses a significant threat, but understanding its mechanics and implementing robust security measures can help mitigate its impact.
By adopting best practices such as rate limiting, anomaly detection, and alternative MFA methods, businesses can protect themselves from the financial and operational repercussions of SMS pumping. Remember, staying informed and prepared is key to safeguarding your business against evolving cyber threats.
To safeguard your business against cyber scams, reach out to Bawn for assistance..