Starting December 1, 2024, India will introduce new regulations aimed at enhancing message traceability and reducing scams related to commercial messages and one-time passwords (OTPs).
These measures, as outlined by the Telecom Regulatory Authority of India (TRAI), mandate that telecom operators monitor the origins of all commercial messages, including OTPs, to address the growing issue of cyber fraud.
Major telecom companies such as Jio, Airtel, Vi, and BSNL will be impacted by these regulations.
While users may face delays in receiving OTPs during activities such as banking transactions or online bookings, these temporary setbacks are deemed necessary for fostering a more secure digital landscape in the future.
What will really defeat scammers?
The delay in SMS delivery means that users will have to wait longer to complete transactions that previously took mere seconds. This approach raises questions about its effectiveness, as funds are often transferred to scammers’ accounts immediately after an OTP is entered. A more effective strategy would have been to delay the crediting of funds to the recipient’s account rather than the SMS notifications.
Such a measure would provide individuals with the necessary time to recognize and halt fraudulent transactions.
Unfortunately, it appears that the decision-makers may not be considering this practical solution. Furthermore, banks should face consequences for lax adherence to Know Your Customer (KYC) regulations, as many fraudulent accounts lack proper KYC documentation, often with complicity from bank staff who may receive a share of the proceeds from these scams. Banks could benefit from adopting practices similar to those in stock brokerage, where accounts that remain inactive for a specified period are classified as dormant, freezing outgoing transactions until the account holder requests reactivation.
By employing algorithms to monitor accounts that suddenly become inactive, banks could proactively freeze outgoing transactions, making it more difficult for scammers to exploit dormant accounts.
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