DoT’s Financial Fraud Risk Indicator Reportedly Blacklists 400K SIM Cards Linked to Fraudulent Activities

The Department of Telecommunications' (DoT) Financial Fraud Risk Indicator (FRI) has reportedly blacklisted between 3,00,000 to 4,00,000 SIM cards that were linked with fraudulent activities. According to the report, the artificial intelligence (AI)-powered tool flags as many as 2,000 high-risk phone numbers on a daily basis. FRI was first introduced by DoT in May, and it is based on an analytical tool developed by the Digital Intelligence Platform. It can detect mobile numbers that have either been used in financial fraud or have a high possibility of being used.

DoT's FRI System Cracks Down on Financial Fraud

According to The Economic Times, FRI has detected and blacklisted up to 4,00,000 SIM cards associated with fraudulent activities since being operational. Citing government data, the report claimed that the tool is detecting 2,000 mobile numbers daily. These numbers are said to be flagged as high-risk for being involved with investment or job scams.

Additionally, a senior DoT official told ET that these directly flagged numbers are then used to find more SIM cards on the network via AI-powered pattern matching. The official reportedly also highlighted that FRI has helped UPI platforms such as GPay, PhonePe, and Paytm prevent potentially fraudulent transactions worth crores of rupees, just in the previous month.

In July, the Reserve Bank of India (RBI) advised all Scheduled Commercial Banks, Small Finance Banks, Payments Banks, and Co-operative Banks to integrate FRI into their systems. Due to this integration, the tool's time-to-action on fraud accounts has also been reduced to a few hours, the official told the publication. “This also signals increasing maturity of DoT's Digital Intelligence Platform, which was launched with the aim of real-time data exchange among stakeholders,” the unnamed DoT official was quoted as saying.

The indicator was first introduced in May as a new way to combat India's evolving landscape of financial fraud. It was primarily designed to solve the issue that bad actors frequently change phone numbers they use to carry out scams with. This means traditional systems cannot flag a number unless it has been used to carry out a scam.

In contrast, FRI uses multiple different metrics and AI capabilities to indicate numbers that have a “risk” of being involved with scams. These numbers are then further analysed using government databases, and then a risk rating (between low, medium, and high) is assigned to them.