SMS One-Time Password

How to avoid identity theft with SMS OTP

A security threat can jeopardise important information leading to negative outcomes, from both a business and personal point of view. One of these outcomes is identity theft, but there are ways to avoid it. Between 2017 and 2018, theft of ID, passports and other personal items rose by 29%.

Once an identity is stolen it can be extremely difficult to fully recover, so take caution when entering sensitive information online. Through a process as simple yet sophisticated as SMS OTP, a further level of protection can be added to your private information.

Website Security with OTP and 2FA

For businesses and individual’s alike, website security is crucial in safeguarding sensitive information. Only using single-factor authentication is not always enough, especially if it is a username and password combination.

Even with complex passwords including uppercase and lowercase letters, numerals and special characters, 90% of all passwords are susceptible to hacking.

Since 2013, there have been over 14.7 billion data breaches, meaning on average 4,358 data records are stolen or lost every minute. With some employees opening and using over 20 applications throughout the workday, they tend to come up with only one or a few unique passwords. This could put a business at risk of hacking.

So what can you do about it?

By preventing fraudulent activity and using an accessible 2FA, confidential business accounts that could be at risk are kept untouched. Specifically, SMS OTP has become the leading online protocol for data security used by the world’s most prominent organisations, including banks, insurance, financial services, retail and social enterprise industries.

And, as over 90% of adults have their mobile phone device at arm's reach at all times, it's easy to use, immediate and accessible.

Related: How to improve your website’s security with SMS 2FA

What is online identity theft?

Online identity theft is a crime of fraud that involves stealing and using another person’s identity. Usually, it is used for financial gain like accessing bank accounts, obtaining credit cards or loans and potentially ruin an individual’s credit rating. It can also be used to plan and commit illegal acts, claim government benefits, and attempt to damage reputation by embarrassing or misrepresenting an individual.


Through deception, an individual can gain access to personal information and use it for personal benefit and/or damage another person’s character.

Common methods of identity theft include:

  • Phishing - being misled by someone who is pretending to be a trusted representative and asking you to confirm your details (for example, someone disguised as an employee of your bank)
  • Hacking - security weaknesses being exploited on your computer through malware or ransomware, or payment redirection scams
  • Remote access scams - someone gaining access to your computer and tricking you into paying for an unnecessary service (for example, a misleading ‘support’ team member convinces you to purchase software to ‘fix’ your computer or internet, when it is not needed)
  • Fake online profiles - fake accounts on social media and dating sites can send friend requests and gain access to your online information or hack your profile and mispresent you

Victims are usually the ones who have to pay the cost, but with advanced methods of security, there are ways to prevent this from happening to you. Securing your information and login details online is an integral part of guarding yourself against identity theft. SMS OTP is necessary when accessing your personal data to avoid putting your information at risk.

What is OTP?

One-Time Passwords (OTP) add a layer of security in the form of Two Factor Authentication (2FA or TFA) to confirm identity. Unique, automated and time-sensitive passwords are sent as a method to verify who is trying to complete an action, like login or approve payment online.

SMS OTP is especially practical as it is an offline method of verifying identity. For example, after entering primary login details online, such as a username and password combination, SMS OTP elevates online safety with a secondary factor to deter hackers and robots from accessing your account.

Another example involves online shopping when confirming a payment; once you go through the steps of buying items online, like shipping method and payment method, an SMS OTP is sent to the buyer’s phone to authenticate identification before approving the transaction.

By using an SMS server gateway, businesses and websites can send reliable SMS OTP to customers and users when required. Providing 2FA through single-use, computer-generated passwords sent in a text message. This allows users to manually enter it and prove their identity in a quick and efficient manner before moving forward.


Two Factor Authentication is a precautionary method used to protect data through two steps of authentication before granting access. It is a subset of multi-factor authentification.

The criteria for verifying identity is separated into three categories:

  • Something you know: information committed to memory, such as a password, a PIN or an answer to a user-specific question (for example, ‘What was the name of your first teacher?’)
  • Something you have: a tangible possession, such as a key card or pass, or a soft token, such as an SMS login code sent to your mobile phone
  • Something you are: a physical attribute unique to the user, such as an iris scan or a biometric fingerprint pattern

Using two factors of authentication usually includes the most common criteria to start; inputting a username and password combination that the user has committed to memory. As a universal way of accessing private information, it is also vulnerable to hacking due to its simplicity as well as modern password-cracking technology.

The second factor will usually come in the form of entering a user-specific question, something you have or something you are after the first factor has been confirmed. If the first step in 2FA has been approved but the second step hasn't, any further access or processes are blocked. This means the person or robot trying to complete the action cannot move forward without completing the second factor.

When a unique, one-time passcode is entered as 2FA within the short time period assigned, permission is granted. SMS OTP is an especially fast, secure and uncomplicated way to complete 2FA and reduces the risk of fraud.

Related: SMS 2FA [Explained]

At SMSGlobal we pride ourselves on providing our customers with a robust messaging gateway, quality customer service and support throughout the whole experience. Contact us on 1300 883 400 or