How banks block IRSF fraud and cut SMS spend with VeloVerify

Challenge

International Revenue Share Fraud (IRSF) cost mobile operators an estimated USD 6.7B in 2023 (Communications Fraud Control Association). Banks bear a large share of that loss because attackers seed fraudulent registration flows with premium-rate numbers — every OTP SMS that lands on one of those ranges becomes a chargeback against the bank, sometimes at EUR 2–8 per message. A single coordinated campaign against a retail banking signup form can drain mid-five-figures of A2P spend in hours.

The other half of the bill is quieter but bigger over time: a meaningful slice of every bank’s customer database is dead, ported, or invalid MSISDNs. SMS sent to those numbers is paid for and delivered to nothing. At banking scale, that’s typically 5–15% of monthly volume burned with no business outcome.

Most banks discover both problems only after the invoice arrives.

Approach

The deployment pattern we see working in the field puts a VeloVerify HLR + IRSF check in front of the OTP send, before the message hits the SMS gateway:

• At account signup or “send code” press, the banking app calls POST /v1/lookup with the user-supplied MSISDN.
• VeloVerify returns the number’s status (active / inactive / ported), home network, country, and an IRSF risk flag scored against a continuously updated database of premium-rate ranges.
• If the risk flag is HIGH, the bank short-circuits the flow — show “this number can’t be verified, try a different one” and never trigger the SMS.
• If the number is VALID and not flagged, the OTP fires through VeloConnect with no added latency the user can feel.

The same lookup feeds back into the bank’s fraud / risk model: a customer record where the supplied phone resolves to a known fraud-MNO range or is freshly-ported into the country gets a higher KYC tier on the back end.

Outcome

Once the lookup is live, the IRSF chargeback line on the operator invoice typically falls to near zero within one billing cycle — premium-rate destinations simply never reach the gateway. The 5–15% “dead-number tax” disappears alongside it. Together, the 18–35% A2P spend reduction is usually large enough that the lookup cost amortizes 4–8x.

The downstream win is harder to spreadsheet but the security team likes it: every successful signup now carries a verified-network attestation, which makes downstream fraud cases easier to investigate and chargeback-friendly.