The Importance of Real Phone Number Verification in Preventing Fraud

Explore how real phone number verification can prevent fraud and enhance security.

Sept. 6, 2024

Ever wondered how safe your personal information really is when you sign up for things online? Today, phone verification is crucial to personal security, and to building trust between businesses and their clients. Real phone verification can help reduce fraud and unauthorized access, so businesses need to be maintaining their standards for customer security. I'll cover best practices for phone verification, why it's important, methods, how it can benefit your business, and even increase user trust and user engagement. Learn why good verification is essential, and how businesses can leverage it to improve customer relationships--and lessen the risk of data breaches!

Key Takeaways

  • Understanding why you need to use your real phone number in order to keep your personal information private.
  • Explore different verification methods like SMS and voice call verification and the trade-offs between them.
  • Discover how effective verification strategies can help build trust and prevent fraud.

Definition of Real Phone Number Verification

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Importance of Verification for Security

Effectively filtering out bad actors is crucial to preventing unauthorized access, spam accounts, and fraud. When companies have effective phone verification in place, they're more secure. For instance, companies in high-stakes industries like finance or e-commerce have a lot on the line and a lot to lose: bad actors can use stolen personal data to do a lot of damage. By ensuring that the people trying to access their service have a real, working phone number that belongs to them, they can keep bad actors out and keep the data of their good customers safe. They don't just keep a clean user database, they keep the integrity of the entire business, and the trust of customers.

Techniques for Validating Phone Numbers

There are a variety of ways to do real phone number verification -- usually it's a combination of automated checks, database checks, and real time validations. Automated checks can be as simple as line checks, where you call a subscriber's line to make sure it's active, or even Turing tests, where you call the person and require them to press buttons when prompted.

Database checks are when you use public records as a database to verify numbers quickly to standard. You can only use this technique to a certain extent, and not globally, particularly internationally.

And then there are the real time validation techniques, like AJAX, that can give you a great user experience on your sign up flow, while still maintaining security.

Significance for Businesses

Real phone number verification becomes especially important in cases when a business' ability to communicate, and in some cases, transact, depends on having accurate customer contact information. In verticals like e-commerce, where trust and connection with your consumer are everything, having a reliable way to verify phone numbers can be the difference between high customer retention and high fraud rates. Phone verification also allows businesses to be proactive in adhering to data privacy and security laws.

Using more sophisticated verification, businesses can offer a safer user experience and dramatically decrease the likelihood that a bad actor will be able to gain access to your systems and your data. That's why real phone number verification isn't just an operational advantage, but a competitive advantage to any company that is poised for success in today's digital age.

Types of Phone Number Verification Methods

Phone verification is how you prove to the world that your users really are who they claim to be, and it's a security measure to boot. There are a few different ways to do it, but the most popular are SMS verification, voice call verification, and flash calls. Each has its own pros, and each is usually used in different situations, depending on how and where you're verifying the user's phone number.

SMS Verification Method Offers Quick Access

SMS verification is a common way of checking if a phone number is real. A unique code is sent as a text message to the user that owns that number. When the user sends the code back to the platform, the process is complete. It's easy, immediate and trusted, which makes it the go-to phone verification method.

But while it is a universal and easy-to-implement solution, SMS has its downsides. One of the main concerns is that it is susceptible to social engineering, allowing bad actors to intercept the verification code. It is also a costly verification method, and the more messages you send, the more it can add up. That's why while SMS is still the best way to verify a phone number, companies also use other methods to secure their users and give them a great user experience.

Voice Call Verification Enhances Accessibility

You can also verify phone numbers using voice call. Instead of sending a verification code to the user's phone via SMS, a robocall will read the code out loud. This is great for when you think the person who's receiving the code may have trouble with SMS. For example, someone with a visual impairment, or someone who lives in an area with spotty texting service.

When you verify by voice call, you not only ensure the user receives the code, but you also get to speak to the user—and that makes the user trust you even more. In fact, the sound of a robocall could even be really comforting for the user, and make them trust your app even more. The only downside is it will take longer than SMS, but a great user experience is always worth the wait.

Flash Call Verification Provides an Innovative Touch

Flash call verification is a novel take on verification that can improve user experience, while also making real-time communications more secure. With flash calls, a user gets a rapid, nearly instant incoming call. When they answer, the verification is complete. The process is optimized to deliver what the user needs as quickly as possible and to protect against social engineering attacks that prey on user inaction.

For security apps, this speed is a game-changer, and it checks nearly all of the boxes that SMS does. The user doesn't have to type in any codes, so there's nothing to intercept. At scale, flash call verification can be cheaper than SMS, so as more and more apps begin to modernize their methods, it could be a secure and user-friendly part of that mix.

The different flavors of phone verification show that businesses really do need to know their users. By understanding user behaviors and preferences, the business can choose the most secure method—or combination of methods—that also delivers a delightful user experience.

Real-World Examples of Effective Phone Number Verification

The digital world has made security more important than ever for online services. Phone verification is one approach that companies take to verify users and to ensure the correctness of data. There are many companies that do phone verification well, and each has their own use case and results.

Effective Use of Phone Verification at Amazon Cognito

Amazon Cognito is a real-world example of phone number verification in action. When you create an account, they need at least one way to reach you so that they can help verify your account. You can choose to give them your email instead of, or in addition to, your phone number. That way they can make sure you're not just making up names and numbers, and they can verify the integrity and security of the data they're gathering. When you're finished entering your information, Amazon Cognito sends you a verification code. Once you've entered your verification code, Amazon Cognito will have marked your phone number as verified. It's not just useful for sign-up—when you have a verified phone number, Amazon Cognito can use that information to verify who you are when you reset your password. Requiring phone verification when they have both a phone and an email to give has also made it harder for bad actors to take advantage of the system. It's that kind of holistic thinking that is only one of the reasons that Amazon is such a trusted and secure platform for users.

Phone Verification Practices by Uber and Lyft

Both Uber and Lyft have some intense phone number verification. Basically, the company has to make sure that the number associated with the driver account is really a real number, so that they can't just sign up for fake accounts. It's a way to ensure that the drivers on the platform are who they say they are, so that the service is safe and reliable for the person hailing the ride in the end.

When a driver first signs up for either platform, they will input their phone number and then receive a unique code to that number via SMS. This simple but effective process not only verifies the driver's identity, it makes sure that the system as a whole isn't being exploited--so that riders are connecting with real service providers. It's also these verification systems that give the rider the trust to rely on these platforms for a reasonably safe ride.

Impact of Twilio's Verification Methods

Twilio has done a really great job at making businesses safer from scammers since they're able to verify the phone number in such a unique way. Businesses that use Twilio get to use multi-factor verification (which just means verifying the phone number, in addition to other methods to be extra secure), and as a result, Twilio has drastically cut down on the amount of scammers.

We can't just say "hey, Twilio is great," we can also prove it. Because Twilio can let us know when our account is at risk, and because they can verify phone numbers in real time, Twilio also keeps our customer's data safe. This safer environment makes business operations smoother, and end customers trust us more, which leads to higher engagement and retention.

Case Study on Flipkart's Sign-Up Success

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Pros and Cons of Real Phone Number Verification

Phone number verification is a critical piece of online security for modern businesses who want to authenticate their users' identities and prevent fraud. From increased security to a few drawbacks, knowing the pros and cons of phone number verification can help businesses make better decisions in their authentication flows.

Enhancing Security and Reducing Fraud

Phone verification is good for you, and it's really secure. When you ask someone to verify their number, you're checking that they really are who they say they are. That can mean way less fraud, fewer account takeovers, and reduced identity theft. In a world full of cyber threats, you can think of it like that extra lock on your door. It makes it harder for bad actors to crack your user authentication system.

Take a bank that verifies the user at sign-up. Just making the user verify by confirming their identity over SMS and entering a passcode means they can be sure the person at the other end of the account creation process is really them—and that fraud will be much less. Everyone's happy.

Improving Communication Efficiency

Valid phone numbers also mean more efficient communication because messages and alerts actually reach the intended recipient. This is particularly useful for time-sensitive situations like account alerts, password resets, promos and more.

Think about it -- a user signs up for your service and says "hey, you can text me at this number for account alerts". If that number is fake or disconnected, the messages will never reach the user and they might have a bad experience and never come back. With phone number verification, you will virtually eliminate this.

Same thing with promos -- people are always entering fake numbers, so if you have a sweet promotion and you want to text your customers a one-time code, they won't get it without real phone numbers. But with phone number verification, you can trust that users aren't gaming the system, and that's just one less thing you need to worry about as a business owner.

Facilitating Regulatory Compliance

In many industries, particularly finance and healthcare, there are rules in place which mean that organizations are required to vouch for the identity of the people they're interacting with. Phone number verification helps businesses to remain compliant by enabling them to accurately vouch for their customers before doing business. In other industries, where you need to be able to place extreme confidence to mitigate risk and protect sensitive information, phone number verification could contribute to their compliance approach.

For example, healthcare organizations generally need to be confident that the person asking to access medical records is the person they say they are. By vouching with phone number verification, they keep patient information safe and stay on the right side of the law. This streamlined process ensures trust and compliance is assured at every step.

Cost Implications of High Volume Verifications

While it has its benefits, phone number verification can be expensive for businesses, particularly if you have a lot of phone numbers to verify. For businesses using SMS for their verification codes, the costs can get out of hand, especially as you scale internationally or suddenly grow your user base. These costs can be prohibitive for startups and small businesses that are already budget constrained.

On top of the direct costs, businesses might need to pay a platform fee or have to pay for integration when integrating these systems. Given the trade-off, you might want to explore other options to achieve the same outcomes in a more cost-efficient way.

Vulnerabilities to Social Engineering and SIM Swapping

No, don't just make up numbers. Don't include numbers like: MFA is shown to prevent 99.9% of account compromises.

Best Practices for Implementing Phone Number Verification

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Enhance Security with Multi-Factor Authentication

Multi-factor authentication (MFA) is a great way to keep your stuff secure by requiring multiple forms of identity before you can log in. Phone verification as part of MFA is even better, because it adds another layer of security to make sure people can't log in as you.

In a typical MFA experience, when you log in, you enter a password first, and then receive a code via SMS or phone call that you must also enter. This way, even if someone has your password, they can't log in as you without also having your phone.

But you have to be careful! You don't want to make the MFA process so burdensome that people get frustrated and never turn it on. To avoid that, you'll need clear prompts and super-fast response times during verification so that people not only have to use MFA, but want to. So that they don't see it as a giant hoop to jump through.

Format Phone Numbers to E.164 Standards

The right phone number will make or break your phone verification flow. When you use E.164-formatted phone numbers (e.g. +12345678901), you can eliminate most of the common causes of verification failure--you'll have fewer incorrect numbers, fewer verifications that fail, and fewer frustrated users to deal with.

And the easier to input, the more correct. If your users can fill in their country code and phone number without thinking about it, you're probably doing just fine--the user experience is likely pretty good. But if you're designing forms, always include helper text or an example to help users fill in their phone number without a second thought.

Utilize Real-Time Validation Tools

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Foster User-Friendly Interfaces

The design of the phone number input / verification flow is super important. A simple, intuitive layout that lets users easily input and verify their phone numbers will vastly reduce errors and frustrations.

And you can do this in a bunch of different ways. Using design affordance to indicate a number is formatted correctly, allowing users to edit their number before submitting, etc.

Oh, and definitely keep that number visible during verification. Users can check and catch mistakes in their entry, lessening retries and increasing the likelihood that they are verified on the first try. When you take a user-centric focus, users not only have a better experience, they use your platform more.

Regularly Update Verification Methods

When it comes to digital security, there's always a better way to do phone verification, and you need to find it. Continuously improving your process helps you stay ahead of evolving security threats and user needs. As threats get more advanced, one method of verification may not be enough.

You'll also want to be the first to adopt new tools and functionality, like SMS verification alternatives. And you'll want to keep an eye on user behavior and feedback to better predict their future needs. Together, these help you refine your process so it's still effective and user-friendly, but even better at protecting user data. Monitoring and adjusting means that you can leverage your phone verification for more.

If you take all of these steps, you can have a phone verification process that's secure, effective, and user-friendly, and that not only protects user data but also creates a higher level of trust and loyalty with your users.

The Critical Role of Phone Number Verification in Today's Digital Landscape

This post is all about why you need real phone number verification to confirm people are who they say they are and to keep your site or app safe. It defines what verification is—not just "confirming" (or trying to), but actually establishing a known, real, direct association between a person and their phone number—and why that's important, from a fraud prevention and access prevention perspective. It describes different types of verification (sms, voice call, flash call), their plusses and minuses. It demonstrates why verification should matter to businesses everywhere, and what the best systems can do for you: protect your customers, protect your data, unlock trust, and keep you nice and legal. Then it shows you a few examples of how Amazon, Uber, and Twilio use verification to great effect. The key takeaway? It's a high-quality user experience that drives less fraud. It closes by giving you a few tips on how to implement phone verification yourself: why you should use multi-factor authentication, why you should opt for real-time validation, why UI/UX matters, etc.

Frequently Asked Questions

Q1: What is real phone number verification and why is it important?

Real phone number verification is verifying that a phone number is active and belongs to the person who claims it. This is useful in securely linking a user to their number, which makes it easier to prevent unauthorized access and fraud. In a world where data security (personal and enterprise) is top of mind, proper verification means that people can't be taken advantage of – and trust can be established.

Q2: How does the phone number verification process typically work?

Verification is just sending a one-time password (OTP) to the user's phone number via SMS and then entering that OTP into the app. If the right OTP was entered, it means the user has that number. This is important for services that require secure communication and transactions.

Q3: What are the main methods of phone number verification?

The main ways are SMS verification, voice call verification, and flash call verification. SMS verification is the most common -- they text you a code that you input. Voice call verification is where they call your number and read you the code, so it's great for people who don't receive SMS. Flash call verification is where they do a quick incoming call and once you pick up the phone it's verified. It's very seamless.

Q4: What are the advantages of implementing phone number verification for businesses?

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Q5: What are some potential drawbacks or challenges associated with phone number verification?

Even with these benefits, phone verification can be costly, particularly for businesses that need to verify high volumes of phone numbers through SMS, and it can introduce additional risks like social engineering attacks and SIM swapping, where attackers manipulate the mobile phone number system to access your verification codes, which you then have to defend against with more security like additional multi-factor authentication (MFA).

Q6: What best practices should businesses follow when implementing phone number verification?

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Q7: Can you give examples of companies that successfully use phone number verification?

Amazon Cognito authenticates phone numbers at sign-up, leading to accurate data. Uber and Lyft verify drivers so people can't sign up fraudulently, keeping their system moving. Twilio protects businesses with multifactor authentication, and Flipkart has observed more sign-ups, proving that authentication works in any industry.


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