Early in 2023, Mobile Ecosystem Forum (MEF) published an article about ‘a special kind of menace’ threatening the future of the business messaging market. The post described how one e-commerce enterprise was regularly sending 300,000 authentication messages a month, but when the fraud was uncovered, it realised 270,000 of these texts were effectively worthless.
So what is this special kind of menace? It’s Artificially Inflated Traffic (AIT).
Yes, AIT is very much the A2P fraud of the moment – a growing problem that has a significant impact on the industry, leading to lower engagement rates, lost revenue and ultimately a loss of trust.
Artificially inflated traffic: what is it, and why is it here now?
Before we delve deeper into the nature and impact of AIT, let’s consider why it is here in the first place. And there’s a simple reason: the vast and widespread success of the A2P (business) messaging industry.
In barely two decades, business messaging has become deeply embedded in the communications of enterprises and their customers. So much so that in 2022 the market generated around $25 billion, according to Mobilesquared.
Regrettably, this kind of revenue always brings in bad actors. So as soon as business messaging went mainstream, criminals polluted the sector with fraud and spam. Much of this malpractice targeted consumers, with the intention of tricking them into buying bogus products/services or stealing their identities.
But at the same time, a different kind of ‘insider’ fraud targeted the enterprises paying for and sending the messages. Here, dishonest intermediaries would use various techniques to route traffic through illegitimate channels (grey routes, SIM boxes etc.) or even trash the messages entirely.
AIT is their newest weapon. Here’s how it works. The fraudulent aggregator uses either a bot or an emulator to complete thousands of registrations for an enterprise’s services. It then charges its enterprise customer a fee for sending one time passcodes to these non-human customers. The enterprise pays for the traffic, even though the customers don’t exist. The aggregator might even manipulate the customer conversion numbers to perpetuate the fraud.
AIT is affecting ‘43 percent of companies’
AIT has quickly become a widespread problem in the A2P industry. According to a report by the MEF, 43 percent of companies say they experienced AIT as long ago as 2019, while 60 percent of companies believe that AIT is increasing in frequency.
And early in 2023, AIT hit the headlines when Twitter reported that it may have lost $60 million per year to bogus bot traffic.
These statistics show how AIT is a significant problem not just for A2P messaging but also for the telecom industry as a whole. It highlights the need for stricter regulations and more advanced verification systems to combat this issue effectively.
The negative impact of AIT on the A2P Industry
All fraud is corrosive. In the short term it obviously damages the specific enterprise or consumer targeted by the malpractice. But longer term, it hurts the whole ecosystem. Let’s take a closer look at the negative consequences.
- Enterprise customers lose trust
When companies use A2P messaging services, they expect their messages to reach their intended recipients – real people who have opted-in to receive such messages. However, when there is a large volume of artificially inflated traffic, it becomes difficult for legitimate messages to stand out from spam or malicious ones. As a result, enterprises become wary of using A2P messaging services altogether.
- Messaging campaigns become less effective
High levels of noise generated by AIT result in lower engagement rates and poor ROI for businesses using these services.
- There can be legal implications
AIT has legal consequences as well. These activities violate anti-spam laws and can lead to costly fines for businesses involved in these practices.
- AIT increases the risk of identity fraud
AIT generates large amounts of data that can be used to create synthetic identities. This data can include phone numbers, email addresses, and other personal information that fraudsters can use to create fraudulent identities. With access to this data, fraudsters can combine it with other stolen information to create a seemingly legitimate identity that can pass identity verification checks.
A solution for AIT?
How can the industry fight back against the ‘special menace’ of AIT? At GTC, we believe the remedy lies in implementing stricter regulations and more sophisticated verification systems. Such solutions can use advanced technology, such as machine learning to identify artificial traffic and stop it before it reaches its intended target.
Conclusion
AIT remains a significant problem for the A2P messaging industry. It not only reduces the effectiveness of marketing campaigns but also damages trust among enterprise customers. Additionally, it can drive synthetic identity fraud, which is an increasing threat to businesses across all sectors.
The solution requires a collective approach. If stakeholders work together to develop new regulatory and technological defences, the A2P industry can continue to grow – and preserve the trust from enterprises that rely on these services to reach their customers.
If you want to know more about how GTC can help your anti-fraud strategy, please contact us here.
Global Telco Consult (GTC) is a trusted independent business messaging consultancy with deep domain knowledge in application-to-person (A2P) services. GTC provides tailor-made messaging strategies to enterprises, messaging service providers, operators and voice carriers. We have expertise in multiple messaging channels such as RCS, Viber, WhatsApp, Telegram and SMS for the wholesale and retail industry.
GTC supports its customers from market strategy through service launch, running the operations and supporting sales and procurement. The company started in 2016 with a mission to guide operators and telcos to embrace new and exciting opportunities and make the most out of business messaging. For more information or industry insights, browse through our blog page or follow us on LinkedIn.
