What Is SMS Pumping Fraud and How to Stop It

What Is SMS Pumping Fraud and How to Stop It

SMS pumping is becoming an increasingly urgent problem for businesses that use SMS messaging channels to communicate with their customers. SMS pumping fraud artificially increases SMS costs, reducing conversion rates. This industry-wide problem affects all providers and is a risk to many businesses.

So what is SMS pumping fraud, and how can your business know if it's been victim to such an attack? 

In this blog, you'll learn what SMS pumping is and how it works, along with the ways it can negatively affect your business. Then, discover ways to detect and prevent SMS pumping fraud to protect your organization from an attack.

What is SMS pumping?

Also known as SMS toll fraud, SMS pumping is a type of fraud attack in which bad actors request a high amount of text message traffic from unprotected SMS endpoints. By targeting your automated SMS messaging channels—like one-time passcode (OTP) requests or webform responses—fraudsters can make money from the SMS messages you send them.

Fraudsters have long targeted websites and applications that rely heavily on SMS-based OTPs for identity verification and user login. Businesses that typically use OTPs in their user authentication include:

• Banking websites

• E-commerce platforms

• Social media sites

• Ride-sharing or delivery apps

But SMS pumping is no longer just a verification problem. Attackers have expanded their targets to include lead generation forms, transactional notifications, marketing campaigns, and inbound chatbot endpoints. Because SMS remains a popular channel across various industries, it's crucial to understand the risks and implement robust security measures to protect your organization and customers from this growing threat.

How does SMS pumping work?

In an SMS pumping scheme, attackers use bots to flood any public-facing entry point that triggers an automated message. Fake phone numbers are submitted at scale – through OTP, sign-up flows, notification triggers, or chatbot endpoints – and your business pays for every message sent to those numbers. 

For example, consider the fictional company PickedClean Organics, a small online business that offers organic product delivery. PickedClean offered promo code for first-time, new customers registering on their website.

When customers confirmed their phone number with an SMS OTP, PickedClean was able to verify one promo code per one real human.

However, a fraudster used automated bots to infiltrate their flow, inserting numerous numbers requesting the SMS OTP. Fraudsters often use a set of phone numbers with similar prefixes.

PickedClean didn't know that many of the numbers were fake, so this influx in requests to set up new accounts triggered many SMS messages, inflating their SMS charges and impacting their overall budget.

This type of attack is a brute-force problem that creates sudden, high-volume spikes hitting a single OTP endpoint. But attackers now also use low-volume distributed bots that blend into normal traffic patterns, accumulating costs quietly over days or weeks before the damage becomes visible. Inbound chatbot loops are an increasingly common variation where bots trick two-way messaging endpoints into automated reply cycles that run up charges on both sides. 

Either way, the consequence for your business is real. Below, we’ll go over the ways SMS pumping fraud can affect a victim organization. 

How does SMS pumping fraud affect businesses?

SMS pumping fraud can negatively affect your business and cause damage, including increasing your SMS costs, lowering conversion rates, and spamming your SMS channels.

Increased SMS costs

SMS pumping fraud costs hit your budget in two ways. First, a high-volume attack can happen overnight and surface on your bill before you even know it happened. Second, a low-volume, distributed attack can accumulate quietly over days or weeks, unknowingly blending into normal traffic patterns.

To add insult to injury, the money your business spends on these SMS messages will never yield results. The numbers are fake, and the customers are, too.

Lowered conversion rates

Since you're essentially signing up fake "customers" (bots) or sending OTPs into the void, your user base becomes inflated with "users" who will never convert. This not only artificially lowers your conversion rates, but also increases cost per conversion and wastes valuable resources. 

Additionally, fraudulent requests can strain customer service by triggering inquiries, and delays in receiving OTPs due to SMS pumping can frustrate genuine users. 

In the worst-case scenario, security concerns trigger blunt blocking rules, like rate limits, geo-restriction and prefix bans, that can’t tell a fraud spike from a legitimate marketing surge. Real customers get caught in the filter, disrupting campaigns and undermining the strategy you’re trying to protect.

Overwhelmed communication channels

Bots spamming your SMS channels can have a domino effect on your entire system. More than just a slight delay, a surge of fraudulent traffic can overwhelm your resources and lead to these downstream effects:

• Increased downtime: In severe cases, a large-scale SMS pumping attack can even cause system crashes or downtime. This can completely prevent users from receiving any SMS messages, hindering essential actions like logins or password resets.

• Added operational burden: Engineering, fraud operations, and customer support all end up on the same call digging through logs, delivery reports and invoices to try to reconstruct what happened, when it started, and what it cost. The investigation and cross-team coordination can be as expensive as the fraud itself. 

These negative effects can wreak havoc on your organization. But how do you know if your system is getting hit with an SMS pumping fraud? Below, we'll cover the ways you can begin to detect this type of fraud.

How to detect SMS pumping fraud

Now that you know what SMS pumping fraud is, how can you tell if it's currently affecting your business? Detecting SMS fraud can be tricky, but here are four things to look out for:

1. Monitor messaging traffic by use case and geography

Keep an eye on traffic patterns across your messaging workflows – OTP, transactional, marketing , and chatbot. Unusual volume from countries where you don’t have an active customer base, or sudden activity on flows that typically run quiet, is worth investigating.

This is especially true for international destinations where SMS pumping routes tend to concentrate. Fraudsters often use a large pool of phone numbers that include international numbers, resulting in messages from countries where you don't have many customers.

2. Track unexpected SMS traffic spikes and budget drift

Another metric to track is unexpected SMS traffic spikes. Your business will typically send a steady amount of SMS messages weekly. Unless you expect a boost in SMS traffic due to a recent campaign or sale, sudden spikes can indicate bots are targeting your business in an SMS pumping attack.

Additionally, if your SMS spend is creeping up without a corresponding increase in conversions or engagement, a low-volume distributed attack could be accumulating under your detection threshold. Regular spend-to-conversion reconciliation across campaigns and workflows is a reliable way to catch this early.

3. Investigate sequential or clustered phone number patterns

A common indicator of SMS pumping fraud is receiving  requests from phone numbers with similar number patterns. For example, you receive 50 OTP requests in a few minutes. The phone numbers are sequential and end in 1000, 1001, 1002, 1003, 1004, and so on. 

This is a pretty good sign that a bad actor is trying to get you to send illegitimate messages.

4. Analyze incomplete web forms

Analyzing form completion patterns can help identify automated bot activity associated with SMS pumping. Bots might struggle to fill out forms accurately or consistently, which can be a sign that it is not genuine users submitting your web forms. 

5. Monitor inbound chatbot activity for loop patterns

If you run two-way messaging or chatbot flows, watch for unusual spikes in inbound replies, especially automated-looking responses that trigger further outbound messages. Bots that force chatbots into reply loops can run up charges on both sides before the pattern is obvious.

How to prevent SMS pumping

As the global leader in trusted digital communications, Twilio takes a unique approach to fraud prevention with protection that is built into the platform instead of bolted on. Every customer gets baseline SMS pumping protection while businesses with more complex global workloads can add additional layers of precision, control, and pre-send intelligence. 

Let's take a look at some security features you might consider to safeguard your business from SMS pumping fraud.

Verify Fraud Guard

For businesses using Twilio’s Verify API for OTP and user verification, Verify Fraud Guard is purpose-built for that use case. It analyzes your current and historical SMS traffic for unusual patterns and, when it detects fluctuations in SMS destination traffic(SMS pumping fraud), it automatically blocks the prefix of the destination of the suspected fraud. 

As the first SMS pumping solution to hit the market, Verify Fraud Guard has saved Twilio customers $62.7 million in fraudulent costs between June 2022 and October 2024. Verify also provides a global network optimized for delivery and conversion, multiple channels including push notifications, WhatsApp, voice, and email, and the ability to abstract away the complexity of omnichannel user verification.

SMS pumping protection for Programmable Messaging 

If you already use our Programmable Messaging API, you can utilize SMS Pumping Protection. Powered by classification models trained on billions of multi-channel messages annually, it detects and blocks common international SMS pumping attacks. 

For businesses managing complex global messaging across marketing, transactional, and chatbot channels, you can add precision and control with country-level risk controls and overrides.

Lookup SMS Pumping Risk Score 

Lookup SMS Pumping Risk Score  employs a unique risk assessment model that considers data from Twilio's network, incorporating signals from Verify Fraud Guard along with other indicators related to risky carriers, unusual SMS traffic patterns, and low conversion rates. This comprehensive approach helps determine the likelihood of a phone number being associated with fraudulent SMS activities. The Lookup API uses real-time risk signals to detect fraud and trigger step-up authentication when needed.

Other solutions

In addition to these built-in options, you can take additional steps for fraud prevention:

• Add CAPTCHA to any form that triggers an automated SMS to stop bots before they reach your messaging flows. 

• Add behavioral bot detection tools that can flag non-human form activity in real time, complementing CAPTCHA for more sophisticated automated attacks. 

• Consider setting limits like disabling geo permissions for countries where you don't conduct business.

• Set rate limits on messages sent to the same mobile number range or prefix.

• Explore less SMS-reliant options for user verification to reduce your attack surface:

• Introduce a delay between OTP requests from the same number or IP to limit how quickly bots can cycle through fake numbers.

• Email-based OTPs are generally less susceptible to the large-scale network abuse that SMS pumping inflicts.

• Set up an authenticator app that generates time-based one-time passwords. This reduces the need to send SMS.

• Use hardware tokens that plug into your computer and generate unique codes. These are secure from hacking because they are pieces of hardware that a fraudster would need to physically own to hack into a system.

Trusted digital communications with Twilio

No matter how your business uses messaging, Twilio offers a solution to protect your business from experiencing SMS pumping fraud. Though the amount of fraud each business experiences will fluctuate month to month, Fraud Guard has already protected customers from over 569 million fraud attempts.

Fraud not only affects your company's bottom line, but it can also damage your reputation and customer trust. Learn more about the rising costs of digital fraud. If you're ready to get started with or want more information on how Twilio can help you prevent SMS fraud, talk to sales today.