How Can Phone Number Validation Prevent Fraud

Did you know that in 2023 businesses around the globe experienced more than $485 billion in losses to digital fraud, and a rather significant portion of that started with something as simple as a fake phone number?

Fraudsters love exploiting weak links, and phone numbers are often the easiest. They create accounts with disposable numbers or VoIP numbers, make orders that they never pay for, and are able to get past verification checks with landline entries that can’t even receive a text message.

What many organizations do not realize is every unverified number is another potential door left wide open for scammers.

But here is the good news: with the right tools, verifying phone numbers does not just clean up your database, it can actually shut down fraud before it even starts.

The Hidden Role of a Phone Number in Digital Identity

Today’s phone number is more than just a number to call or text someone. It has become a digital fingerprint, uniquely linking someone to their online accounts, bank and shopping apps, shopping history, even medical records.

Criminals understand this and utilize fake, stolen, and temporary phone numbers to bypass security verification. With a disposable number, a fraudster can instantly create dozens of fake accounts, abuse free trials, or hide their real identity long enough to commit identity theft or financial fraud.

This is where validation tools come into play. By instantly checking whether a number is real, active, and tied to a legitimate carrier, businesses can expose fake identities before they cause damage. Instead of reacting after fraud happens, companies gain the power to block bad actors at the very first step.

How Phone Verification Service help in Fraud Prevention

A phone verification service acts as a filter that allows only real, reachable numbers into your system. Instead of relying on trust alone, it adds a quick but powerful checkpoint to confirm whether a number truly belongs to a human user.

You see this in action every day. When you receive a one-time password (OTP) to log in, when you confirm a new account with a text code, or when a payment requires a mobile confirmation-those moments are verification at work. They prove that the number is not just valid but also active and in the hands of the person attempting the action.

For fraudsters, this creates a roadblock. Fake or temporary numbers cannot receive OTPs, and disposable VoIP numbers are often flagged during validation. That means fewer fake sign-ups, fewer fraudulent transactions, and fewer wasted resources for businesses.

Phone Number Identity Check: Ensuring Authenticity of Users

Performing a phone number identity verification is more advanced than asking whether a user is who they say they are. A phone number identity verification acts like a background check for a phone number; it verifies if the phone number is associated with an identity and indicates all of the ways it is being used. The objective is pretty straightforward: to verify a phone number is assigned to a real person and to prevent a fraudster from hiding behind the phone number by using a disposable or fake entry.

How Phone Number Identity Check Works

Implementing a phone number identity check is more than just verification to see if the phone number is valid. It uses layered signals as a measurement of authenticity, which helps identify usage trends fraudsters could not replicate. This is how is works in steps and layers:

Step 1 – Carrier verification

A phone number identity verification is based on several layers that stack on top of each other to verify authenticity and help expose fraud rings. Carrier verification is defined as the very first layer of the verifications arrangement by confirming the telecom network the phone number is owned by. To know if the carrier information in their phone number fact finding aligns with what the customer has provided as identity or where they claim to be located – it is more difficult for the fraudster to conceal and display inconsistencies of its self.

Step 2 – Line Type Detection

The next call to action is line type detection, which detects if the number is mobile, landline or VoIP. Mobile numbers tend to relate to real people, and they can utilize SMS-factor security mechanisms such as OTP’s. They, therefore, can be regarded as more trusted. VoIP, or throwaway numbers, on the other hand, can be obtained easily by fraudsters in an untraceable manner. We can determine the line type upfront allowing a company to heed a signal to block or additional scrutiny before being harmed.

Step 3 – Risk Flagging

A further important layer is risk flagging, which scans telephone numbers against fraud databases and blacklists. It flags the numbers which have spam campaigns behind them, chargeback abuse or dubious activity. A number making unsuccessful transaction attempts repeatedly in a short amount of time, can flag as a high risk, and allow a business to make a response quickly.

Step 4 – Activity Status

Finally, there is an activity status check which establishes whether a number is active and able to receive calls or texts. Recycled or inactive numbers are a potential risk through unknowing use – specifically if those numbers were tied to sensitive accounts that could be hijacked. This is why activity status checks are important because businesses want to limit the numbers and engage only active live and traceable users.

Which industries can benefit from the use of phone number validation to prevent fraud?

Industries that are highly regulated due to the sensitive data they manage (finance, healthcare and insurance) reap the most benefit from phone number identity checks and verification. In finance, for example, banks and lenders can establish that loan of credit card applicants are linked to real, traceable phones, not just an identity that fraudsters created with  the establishment of a synthetic identity or multiple fake applications. This may lead to losses from fraud but also ensures compliance with KYC and AML regulations.

In the healthcare industry, phone number verification serves to protect patients’ private information and secure access to patient email communications, medical histories and telehealth offerings. Hospitals and clinics will be able to prove communications, reminders and sensitive notifications are being sent to legitimate patients rather than fraudsters trying to exploit healthcare systems.

In insurance, phone number verification serves to detect and prevent false claims, duplicate policy applications and identity theft. When insurance companies verify that applicants or policyholders are who they say they are, claims from these suspected fraudulent applications will decrease, and the speed of processing will improve enabling companies to serve their customers better and hold their trust.

LandlineRemover’s Core Features That Stop Fraud in Its Tracks

LandlineRemover is built with advanced tools designed to spot and stop fraud before it causes damage. Here’s how its core features keep your business protected:

1. Smart Number Type Detection

Landline Remover doesn’t just see a number it understands it. By distinguishing mobile, landline, and VoIP numbers it highlights which contacts are trustworthy and which might be high risk. Think of it as having a radar that scans for potential fraud hiding in plain sight. A fraudster using a disposable VoIP number to claim multiple free trials is instantly flagged, preventing fake accounts before they even exist.

2. Risk Intelligence and Litigator Detection

Not all danger comes from brand new numbers. Landline Remover taps into databases of known risky numbers and litigators exposing numbers that have a history of fraud or abuse. Imagine an insurance company receiving hundreds of claims daily. With Landline Remover, numbers tied to past false claims or suspicious activity are automatically highlighted, letting the business act before any financial loss occurs.

3. Bulk Verification for Scale Without Sacrifice

Speed and scale matter when fraud prevention has to keep up with business growth. Landline Remover’s bulk verification allows organizations to check thousands of numbers simultaneously. Picture a flash sale on an e-commerce platform with thousands of new users signing up in minutes. Each number is screened for authenticity without slowing down operations or sacrificing accuracy.

4. Real-Time API Integration

Fraud doesn’t wait and neither should your verification. Landline Remover’s API integration enables instant verification at every critical point including account creation, login, and payment transactions. A SaaS provider can now block suspicious numbers as they try to enter, stopping fraud in real time while keeping the user experience smooth for legitimate customers.

5. Multi-Layered Fraud Shield

When combined, these features create a comprehensive fraud shield. Landline Remover transforms phone numbers into actionable intelligence, protecting revenue, securing sensitive data, and safeguarding trust. From finance to healthcare to insurance, businesses gain a proactive defense system, ensuring that every interaction starts with verified and trustworthy contact.

Best Practices for Phone Number Validation Framed as Pitfalls to Avoid

When a business thinks it is optional to validate phone numbers, it is making one of the greatest mistakes regarding validation.

Phone number validation serves as an essential piece to fraud prevention. However, many businesses trip on their own mistakes to poorly validate issues, and make themselves vulnerable flying under the radar. We always recommend not just thinking about validation as an afterthought, but instead think of it systematically throughout the customer journey. Continuous verification, automation, and monitoring is an important component of combating evolving and emerging fraudulent schemes.

Here is a simple guide to the Do’s and Don’ts of phone number validation:

Implement phone number validation at every critical stage such as account creation, login, and transactions	Treat phone validation as optional
Continuously verify numbers rather than checking once	Validate only once and assume it is enough
Use automated APIs for real-time and bulk verification	Rely on manual checks that are slow and error-prone
Monitor and flag risky or suspicious numbers	Ignore evolving fraud tactics
Educate your team on best practices and integrate validation into workflows	Let validation remain a back-end afterthought
Use validation insights to improve user experience	Sacrifice user experience by making verification overly complex

Conclusion

Fraud is not slowing down. Every unchecked phone number is like leaving your backdoor unlocked for a criminal to walk right in. When you change your view and approach phone numbers first, you go from a reaction to fraud to blocking fraud before it starts.

Phone number validation is more than data integrity. It is about validating the risk-free phone number before any interaction. With phone number validation and smart fraud prevention, a weak spot becomes your best defense.

Could that be Landline Remover? Landline Remover will validate phone numbers. It will cut through the noise, increase exposure of hidden risks, and it will enable your team to focus on real customers and not fraudsters.

If revenue, trust, and risk-free customers are of concern, take the steps to enable your phone data as a fraud shield. Get started today with Landline Remover!