Communications Fraud at a Crossroad: Is Consumer Friction Part of the Solution?

One message at last week’s CFCA event was clear: despite years of investment, communications fraud continues to evolve making it challenging to stop.

Communications Service Providers (CSPs), regulators and technology vendors have made progress through the TRACED Act, STIR/SHAKEN, the Robocall Mitigation Database, strong authentication and sophisticated fraud-management tools. Yet, the latest CFCA Global Fraud Loss Survey underscores the scale of the challenge. Global telecommunications fraud losses reached an estimated $41.82 billion in 2025, up from $38.95 billion in 2023. Moreover, 76% of respondents said global fraud losses had increased during the prior 12 months.

Technology is only part of the equation. The other: the consumer. Fraudsters exploit urgency, fear and trust, often impersonating a family member, financial institution or public-safety agency to persuade a consumer to share information or send money. Education and awareness matter, but in an emotional moment, even an informed consumer can become vulnerable.

For some time, the industry’s goal has been to strengthen protection without adding friction to the customer experience. Based on the discussions we heard at CFCA, we concluded that this ideal may no longer be realistic. The path may be deliberate, risk-based friction: small, targeted hurdles that make fraud difficult to pull off.

Canada and Denmark illustrate how identity proofing can introduce purposeful friction without eliminating digital access. In Canada, regulated financial institutions cannot simply rely on information entered into an online form. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) permits a series of prescribed verification methods, including authenticated government-issued photo identification, a Canadian credit file, or a dual-process check using two independent, reliable sources. Under the dual-process method, for example, separate sources must confirm two combinations of a customer’s name, address, date of birth or existing financial account. Some online banks may also require applicants to hold an account at another financial institution before opening a new one. These controls can add steps or friction, but they also make it a challenge to establish an account with stolen or fabricated information. Denmark takes a different approach by using MitID, the country’s national electronic identity, as a trust layer across public services and many private-sector transactions. To obtain MitID remotely, an applicant scans a code and embedded chip in a valid passport or identity card and completes a 3D facial scan that is compared with the document photo. If that process fails or the applicant lacks compatible technology, the alternative is an in-person appointment at a Citizen Service Center with valid documentation. The model does not remove digital convenience; it anchors that convenience to a verified identity that could prove to be challenging to manufacture or hijack.

According to Google, it is moving away from SMS-based verification. Rather than entering a phone number and typing a six-digit code delivered by text, users see a QR code on the sign-in screen and scan it with their phone’s camera. The mobile device can then attempt to verify the number directly with the CSP, using the methods the CSP supports. This approach helps reduce reliance on an SMS code that can be intercepted or surrendered through phishing and social engineering, and it also can target SIM-swapping and “traffic pumping” schemes in which fraudsters trigger large volumes of verification texts to numbers they control and then profit from each message. The model still requires access to a mobile phone and may introduce an extra step, but that is precisely the point: it binds verification to the device in the user’s possession while helping make the process less scalable and profitable for attackers.

The industry may be approaching a pivotal moment. Friction that is applied intelligently and proportionately, may be necessary to protect consumers and address the human factor that fraudsters exploit. That is a sobering conclusion for those who believe technology alone should solve the problem. It could also be a pragmatic one: technology, process and education work well when they reinforce one another, even when security could require additional steps.

This is where TNS Trusted Communications can play an important role. By combining trusted data sources, call analytics, caller authentication, spoof protection, telephone number reputation monitoring and branded calling, TNS can help CSPs and enterprises apply intelligence throughout the communications journey. The goal is not to add friction to every interaction, but to identify risk, authenticate legitimate communications and introduce additional safeguards when the signals warrant them, ultimately aiming to protect consumers while preserving trusted engagement.