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Introduction:
With the advent of the digital era, technological advancements and rising cyber-crimes, it becomes necessary to know your customer (KYC). Phone verification which adds an extra layer of protection is one step mandated by many regulating authorities. ‘Knowing your customer’ not only deals with their details/legal entity but also their verified phone numbers. Businesses can reach them directly when the need arises.
What is phone verification?
Phone verification refers to the process where someone cross-verifies the given phone number by calling the same number or sending a text message and getting a reply from the same number. This way, they can eliminate the chance of a fake phone number for verification, as it will never be verified if the customer provides any fake number. Most information given by the client is cross-checked before moving ahead in business transactions and making any payments.
Businesses verify the bank account, commercial address, identity, and phone numbers to ensure they are dealing with a legitimate party. This also safeguards them against the risk of any kind of financial fraud or any unethical use of data by a third party.
Just Dial, Any Who, Truth Finder or True Caller are a few of the top popular sites for any phone and identity verification. Google’s or other sites’ two-step verification and one-time password (OTP) generation are a few examples of phone verification.
How does phone verification work?
Basic Check:
The first digit should be between 6 to 9. The rest 9 digits can be from 0 to 9. Numbers can be 10 or 11 digits depending on the country.
Business process:
The simple procedure of phone verification entails the concerned business sending an OTP to the prospective customer’s phone number, which they will need to enter while making an invoice to verify that the given phone number is real and reachable in case of any discrepancy in a transaction. They can also retrieve and use the number from their database later for promotional purposes. They may also use this number to send greetings for special occasions and make their presence in their customers’ minds for branding purposes.
Advance Process:
For advanced procedures, a quick Application Programming Interface (API) call analyses the number to fetch further detailed information behind a particular number. These details help businesses prevent fraud and recognize fraud patterns from the initial stage only. Some of these checks include:
- Risk score
- Country of origin
- Original network
- Current network
- Roaming status
- Roaming country
- Roaming network name
- Availability (whether reachable or not)
- Validity
- Current Route
Special vigilance is required if the country of origin differs from that of the client or the current network differs from that of the original network. Fraud risk factors are high in such cases, and proper monitoring is required. It does not say the other party is a fraud or involved in any criminal activity. Still, it’s an indication that the probability of being associated with any fraud is high. Hence, it requires vigilance on the part of the dealing party.
Why do customers provide a fake phone number for verification?
Customers often knowingly provide fake phone numbers for verification to prevent the companies from sending them much promotional and marketing information and vouchers. They do so to preserve their personal information from being leaked out everywhere and Do-Not-Disturb (DND) reasons. Too many promotional messages are sometimes a heavy waste of time for the customer, especially when they are not interested in buying a particular product. Not everyone is interested in sharing their real information; hence, they provide a fake phone number for verification when any brand’s marketing agents ask.
Benefits & drawbacks of phone verification
- To verify that the given numbers are valid, reachable and available at times of need.
- For businesses, it’s equally important to have a verified phone number and avoid any fake ones for verification as they need to send business updates, marketing and promotional vouchers, lucrative offers, and newsletters to market their new and existing products. If the number is not verified and any customer has provided any fake phone number for verification, chances are this information never reaches the intended customer.
- Phone verification is crucial for safeguarding against fraud and anti-money laundering activities. Fraudsters often use other people’s phone numbers for illegal purposes to hide their identity. In such a case, the ultimate owner of the number is held accountable for any such fraud.
- So, to safeguard their customers from such consequences, businesses are responsible for verifying phone numbers to ensure they are dealing with the right parties.
- Many websites provide temporary phone number services, which such clients can use to provide a fake phone number for verification.
Conclusion:
Rising cyber crimes and risks of AML have made phone and bank account verification mandatory by RBI and other regulatory authorities. KYC has been made a mandatory norm as a preventive step. Hyperverge is a leading tech partner providing reliable phone verification services, Identity Verification solutions, and other allied services.
FAQs
When does one need phone verification?
1st-time registration, authorizing upgrades, resetting passwords, reactivating users, refreshing user details, and authenticating transactions are some areas when one needs phone verification.
What are other security alternatives there to phone verification?
Passwords, Biometrics, social network and email login, and ID tokens are a few other alternatives.
