India Implements Comprehensive Reforms to Combat Mobile SIM Card Fraud and Enhance User Protection

The government’s recent announcement seeks to counter mobile phone SIM card fraud by implementing a comprehensive strategy. Telecom Minister Ashwini Vaishnaw outlined the measures, which include banning bulk sales of SIM cards and enforcing mandatory registration of franchisees, agents, and distributors by telecom companies. Additionally, police verification for SIM dealers will be introduced to bolster security.

Previously, bulk purchases of SIM cards were commonplace, but this practice is now prohibited. Instead, provisions have been made for businesses, corporations, or events to obtain SIM cards. However, every individual SIM card owner must adhere to “Know Your Customer” (KYC) norms.

Vaishnaw expressed optimism about these reforms, stating they will significantly reduce cyber fraud and enhance user protection. The Department of Telecommunications (DoT) will issue detailed guidelines for these changes.

Entities can now acquire any number of mobile connections, provided complete KYC procedures are conducted for all end-users. SIM cards will only be activated after successful end-user KYC processes and physical verification of the entity’s premises and address. Alongside thumbprint and iris-based authentication in Aadhaar E-KYC, facial recognition-based biometric authentication is also permitted. Despite these changes, individuals can still obtain up to nine SIM cards based on a single identification.

The point-of-sale registration reforms require sellers to enter written agreements with telecom service providers. Involvement in illegal activities will result in termination of their association with the telco, a three-year blacklisting, and a ₹10 lakh fine. A 12-month compliance window has been provided for existing sellers to register with telcos, facilitating the identification and removal of rogue sellers from the telecom systems.

To prevent Aadhaar misuse, demographic data is mandatory for obtaining new SIM cards or replacements. Mobile numbers disconnected will be reissued to new customers after 90 days. Subscribers seeking replacement SIM cards must complete KYC procedures, with a 24-hour restriction on SMS services.

These reforms supplement changes introduced in May 2023, including the Sanchar Saathi portal for reporting lost or stolen devices and the AI-based software ASTR for identifying illegal mobile connections. The DoT has detected 6.6 million unauthorised mobile connections, disconnecting 5.2 million. It blacklisted 67,000 point-of-sale outlets, blocked 17,000 devices, and registered over 300 FIRs against more than 1,700 points of sale or sellers. Around 800,000 bank or wallet accounts tied to fraudsters were frozen. Of 1.8 million complaints about fraudulently registered mobile connections, 926,000 were resolved. In complaints about lost devices, 300,000 out of 750,000 were traced, according to the department’s Thursday announcement.