The i3Forum, a nonprofit association of international wholesale carriers, has defined the telecoms industry’s first standardized process for handling disputes when one of the parties discovers SMS traffic was fraudulent. This includes definitions and use cases for artificially inflated SMS traffic to encourage the consistent application of the new rules. The need for a new process had become increasingly evident with forecasters warning that the SMS market is being damaged by the increase in artificial inflation of traffic (AIT).
The SMS dispute process emulates the i3Forum’s long-established model for managing disputes over voice calls. The aim of both processes is to prevent fraudsters generating a profit by interrupting the normal sequence of carriers settling bills for traffic they have conveyed. As they observe in their SMS process document:
If payments were stopped in all cases, this would eliminate the incentive for conducting AIT fraud going forward.
Carriers and aggregators should receive notification of an intention not to pay for fraudulent traffic before their invoice is issued, or no later than 30 days after the traffic was routed. The fraud should be described in English with support from Event Detail Records (EDRs). The lack of messages terminating on the destination mobile operator is considered a persuasive indicator that fraud has occurred. The claim should be backed by a police report or other documentation showing that the relevant national law enforcement body has opened an investigation into the fraud.
The process defines AIT for both person-to-person (P2P) and application-to-person (A2P) messaging. The P2P definition is:
Artificial Inflation of Traffic (AIT), occurs when a party generates messages to fake, invalid or legitimate numbers with the intent to:
- Artificially force an originating MNO Mobile subscriber to send P2P SMS to a number of another MNO destination.
- Artificially force an originating MNO Mobile subscriber and its MNO to pay a downstream vendor (a P2P SMS aggregator and/or another MNO) for the artificially generated P2P SMS traffic.
AIT contributes to the forced transfer and cascading of money from the sending Mobile user and its MNO being defrauded to the downstream fraudster that artificially generated the traffic which it can control and collect the revenue of traffic.
AIT with P2P involves sending SMS toward expensive destinations such as premium number ranges or an expensive destination country as a whole. Often, this expensive P2P traffic is found in international P2P.
The definition of AIT for A2P SMS focuses on the exploitation of enterprises who use SMS messaging.
Artificial Inflated of Traffic (AIT), occurs when a party generates messages to fake, invalid or legitimate numbers with the intent to:
- Artificially force an originating Enterprise to send A2P SMS:
- either to a legitimate user of that Enterprise who did not accept to receive A2P SMS from the originating party
- or to a destination that is not a legitimate customer of that Enterprise
- Artificially force and defraud an originating Enterprise to pay a downstream vendor (SMS aggregator or MNO) for the artificially generated A2P SMS traffic.
AIT contributes to the forced transfer and cascading of money from the sending Enterprise being defrauded to the downstream fraudster that artificially generated the traffic as they can control and collect the revenue of traffic to the destination numbers.
The i3Forum observes that most SMS AIT is caused by criminals using bots to prompt the creation of one-time passwords. This problem became a big talking point during 2023 after Elon Musk complained Twitter was losing USD60mn a year because fraudsters used bogus Twitter accounts to generate SMS traffic.
In general, A2P international traffic involves higher revenues and represents most of the AIT fraud when compared with domestic traffic. In 2023, the artificial generation of One-Time-Password SMS is the most straightforward and most used mechanism to generate AIT A2P fraud.
The i3Forum’s advice also includes helpful examples of how fraudsters generate and profit from artificial SMS traffic. This makes the document a useful reference guide for other kinds of businesses too, including the mobile network operators and the kinds of enterprises that are afflicted by SMS-generating bots.
Many of the world’s most important international carriers are amongst the 28 members of the i3Forum, including Vodafone, Twilio, Tata Communications, PCCW Global, Orange, iBasis and BICS. Their interest in tackling messaging fraud complements their emerging leadership role in the tackling of international scams. The ITW Global Leaders’ Forum and the GSMA recently announced they will join the One Consortium, an offshoot association that the i3Forum is establishing with the intention of harmonizing validation of international calls.
The new messaging disputes process document is freely available to all in the hope that its advice will be incorporated into contracts and widely followed in practice. You can obtain a copy from here.
