Study reports fraudsters using fake Aadhaar cards to procure SIM cards

Hyderabad: A joint study by the Telangana Cyber Security Bureau, Indian School of Business (ISB), Institute of Data Science, and Centre of Excellence for Cyber Security titled 'Telecom SIM Subscription Frauds’ shows that SIM card fraud is prevalent during cybercrimes. The study reveals that fraud accounts for 35–40 per cent of all telecom frauds globally, costs the sector Rs 3,600 billion annually.

The report on the study 'Telecom SIM Subscription Frauds: Global Policy Trends, Risk Assessments, and Recommendations' was presented by ISB Prof. Manish Gangawar, Dr Shruti Mantri, IIDS, and Telangana police officers.

During the study, over 1,600 Customer Acquisition Forms (CAFs) were obtained from various police stations, phone numbers of criminals reported by the public across Hyderabad and State, and real-time analysis of data from the PDF-form CAFs was done using Artificial Intelligence (AI) models. An extensive analysis of SIM registration procedures in 160 countries was done to benchmark international best practices, which were said to improve local protocols.

Other findings of the study show data analysis that reveals an alarming trend of fraudsters using fake or outdated Aadhaar cards with pictures of children to obtain false SIM cards for nefarious activities and procuring fake SIM cards for malicious activities with fake Aadhaar cards.

Emphasising a multi-layered, risk-based approach, the study recommends incorporating online identification and verification methods, improving electronic identification processes, and increasing consumer education to combat SIM subscription fraud.

The study aims to reduce the serious risks of fraudulent activities using legitimate customer KYC details.

According to the study, 64.5 per cent of Indian consumers prefer digital KYC (Know Your Customer) for SIM registration, mainly using Aadhaar ID. 89 per cent of the alternate numbers were not linked to Aadhaar, indicating a flaw in the validation processes. The study also highlights OTP-based authentication weaknesses and identifies illegal practices by Point-Of-Sale (POS) agents.

The study also pointed out flaws in real-time subscriber authentication and ineffective OTP-based authentication. Alternate numbers used for verification are often found to be linked to other criminals.

Releasing the report, Cyber Security Bureau director Shikha Goel said, “The study by the Telangana State Police and ISB has brought to light major issues related to SIM card fraud, emphasising that personal information should not be shared with anyone and that lost or stolen SIM cards should be reported immediately.”

She added, “I urge everyone to be vigilant, protect personal information, deal only with certified agents, and report suspicious activity immediately.” She informed that the recommendations of the study will be brought to the attention of the relevant authorities at the national level due to the urgent need to address the issue of its importance, added Goel.