James Garvert is the SVP of TruContact Communications Solutions for TransUnion.
The Federal Trade Commission (FTC) recently issued its “Top Scams of 2024” update, and the results aren’t promising.
Consumers lost about $1.9 billion to fraud through phone calls, texts or emails last year. Notably, they lost more money per person (a median of $1,500) when they interacted with scammers on the phone. As in 2023, impostor scams topped the list again last year.
We know consumers interact with businesses through multiple channels. Fraudsters do as well, gathering information from many of those channels to execute more convincing scams that leverage personal details. But because humans like the personal touch of a phone call, it’s often the tipping point of successful scams.
Businesses also rely heavily on the voice channel. A recent Forrester Consulting study, commissioned by TransUnion, showed 86% of decision-makers across a wide range of businesses agree the phone is the most important outbound channel not only for meeting customer service goals but also for increasing revenues.
But 63% of respondents rated call spoofing among their top five challenges in outbound voice and the second most common hypothesis as to why existing customers are not answering calls.
Due to the fear of fraud, consumers have been increasingly ignoring phone calls. As a result, most businesses are struggling to reach customers. Consumers who do pick up are hyper-aware that they may be scammed.
How Technology Can Help To Restore Trust
To conduct business confidently, consumers and businesses must be certain they can trust the identity of the caller. A key solution that helps restore trust in the phone channel is branded calling.
Branded calling can enable businesses to add rich call content like name, logo and reason for the call to the mobile display, so customers recognize who’s calling and are more likely to answer.
However, while a plethora of new solutions have popped up to protect consumers and businesses from phone fraud, many are reactive rather than proactive, and most don’t incorporate call authentication. It’s simple, if branded calls aren’t authenticated, consumers still don’t know who’s really calling, so they don’t pick up. Worse, branding a call without authentication only enables better fraud.
Identity: The Foundation For Trust
Branding a call isn’t enough to ensure the call really is from who it says. A more proactive approach—and a foundational component of secure branded calling—is call authentication. Authentication establishes a chain of trust so the call recipient can be confident the caller ID wasn’t tampered with.
The Forrester report cited above shows businesses confirm the need for solutions like call authentication to combat call spoofing and fraud. Illegal call spoofing not only results in a hefty price tag but also an uptick in customer service inquiries and subsequent increased operational costs, as well as declining customer trust, which impacts retention.
The Evolution Of Call Authentication
In 2020, the Federal Communications Commission (FCC) mandated carriers implement STIR/SHAKEN call authentication, which works by originating and terminating service providers verifying the caller is authorized to use the number.
During the process, if the signature and telephone identity are validated, a visual notification can be displayed to the called party, marking the call as either verified or suspicious. That approach has helped reduce robocalls and identify bad actors.
But there’s still a gap in call verification. Businesses often use multiple voice carriers, and a call may traverse multiple networks that employ older voice networks that don’t support STIR/SHAKEN. In those cases, mobile service providers can’t tell if calls are legitimate, so the verification and rich call content is dropped before it reaches the recipient.
To make sure the rich content gets to customers, and the call is valid and safe to answer, it’s necessary to add an additional layer of protection by introducing a STIR out-of-band end-to-end verification process. With that approach, calls that aren’t verified may be blocked completely or delivered without caller name and rich content—protecting the business and their customers from fraudulent branded calls.
Consumers have been conditioned not to answer calls because they don’t know or trust who’s calling, but if you add name, number, logo and reason for the call to the mobile display, trust goes up. In the finance sector, there are a vast array of use cases where organizations have experienced better answer rates and engagement when the call recipient is informed.
Many large banks are leveraging end-to-end call authentication, which enables mobile operators to deterministically distinguish legitimate calls from spoofed calls. As a result, mobile operators only allow legitimate calls to reach the intended recipient. Those banks are seeing a significant reduction in fraud.
According to Juniper Research, the branded calling market is expected to grow 3,318% (subscription required) between 2024 and 2029, and the total number of branded calls globally, will increase from 1.5 billion in 2024 to 50.5 billion in 2029.
Implementation Considerations
However, there are a number of considerations related to implementing branded calling. Here are a few to keep in mind:
• The Ability To Scale Solutions Across Carriers And Devices: Without being able to scale, you’ll likely see inconsistent experiences across users. Scalability by branded calling vendors hinges on partnerships with carriers and technology firms.
• The Need For A Comprehensive Solution: Effectively using branded calling also involves a suite of solutions that can enable businesses to vet phone numbers, ensure they’re not being mistagged as spam or blocked and brand calls.
• Lack Of Clarity Around Call Authentication: Understanding exactly what type of authentication is being used to ensure outbound calls aren’t spoofed and whether the solution is network-based or requires an app are critical.
These challenges can impact the effectiveness of call authentication, so it’s worth the effort to drill down into these specific areas when devising a strategy or speaking with vendors. Since consumers have few options to protect themselves, it’s up to businesses to implement solutions that protect them and their customers from the steep costs associated with call spoofing and fraud.
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