CCAP calls for tighter measures against SIM swap fraud

The Credit Card Association of the Philippines (CCAP) has put the pressure on the telecommunication sector, its regulators and lawmakers to apply, execute and enact effective measures to stop credit card fraud through SIM card swap.

CCAP logo

CCAP said on Thursday, Jan. 6, that it has reached out to major telco players such as Ayala Group’s Globe Telecom and PLDT’s Smart Communications, as well as officials of the National Telecommunications Commission (NTC) and members of the House of Representatives to implement stricter rules and laws against SIM-related fraudulent activities.

“The industry has been experiencing high volumes of fraud cases causing financial detriment. These perpetrators have carried out fraud by using the various digital payment platforms to commit crime,” said CCAP Executive Director Alex Ilagan in a statement.

According to CCAP, which has 18 credit card companies as members, fraudulent credit card activities via remote and other digital payment channels have increased by 21 percent since early 2020 when the global pandemic started. It has identified the so-called “Virtual Account Take Over” as the dominant scam in the country today. “This involves taking over and gaining access to One Time Passwords (OTPs) of unknowing customers, enabling fraudsters to perform OTP validated online transactions,” it said.

CCAP has been urging the telcos to tighten their existing Know Your Customer process when onboarding new prepaid and postpaid customers, particularly when it comes to the ID verification process when customers request to change mobile numbers when declaring a lost or stolen mobile unit, it added in the statement.

“We respectfully request that this be addressed urgently. Perpetration of a successful unauthorized SIM swap will affect both the telcos’ and the banks’ customers, resulting in financial losses, loss of public trust and confidence, and close scrutiny from the regulators,” said CCAP in separate letters sent to various groups.

CCAP said it has been pushing for the passage of House Bill 5793 or the “Subscriber Identity Module (SIM) Card Registration Act,” and Senate Bill 2395 or the “SIM Card Registration Act,” which were already approved on third and final reading in both Houses of Congress. Both proposed measures are seeking to establish a system of SIM card sale and registration to “help law enforcers track down those who use mobile phones to engage in criminal activities,” said CCAP.

“To date, there are no existing laws which protect the consumers from this mode of attack from the fraudsters. We believe that the passage and implementation of this law will greatly deter the activities of the fraudsters as they will now have accountability from the use of the then registered SIM cards,” CCAP added.

As for the NTC, CCAP has strongly urged the telco regulator to have a recourse mechanism for affected consumers.

“We believe that this will effectively facilitate a convenient, standard, and reliable reporting platform with a consistent, trustworthy process where consumers report telephone numbers being used by fraudsters or by some random persons offering to click links or awards/prizes or even offer jobs, without these being triggered by consumers. This standardized reporting mechanism is absent in today’s environment which leads hesitancy from the victims to properly report incidents to their respective banks or telecommunication providers,” CCAP told NTC.