Recycled Phone Numbers Fuel a Wave of "Silent" Fraud: Here's How to Fight Back

I’m proud to inform you that strewn about the halls (in a tasteful fashion, of course) of Prove’s headquarters are a variety of receptacles for recycling. Topo Chico bottles, paper bags, and the plastic tops of coffee cups; they all have a final resting spot as we do our part for the environment.

But there’s one type of recycling that is absolutely not going to happen here, and you shouldn’t let it happen where you are either. I’m talking about recycled phone numbers. 

The exploitation of reused phone numbers is a growing fraud trend that’s become popular because it’s both deceptively simple and highly successful. It has been proven to be effective against legacy verification methods, and it's increasing risk for all organizations that use OTPs.

The Hidden Vulnerability: Why Recycled Numbers Are a Fraudster's Goldmine

The core issue is this: bad actors are leveraging recycled phone numbers – numbers that were once legitimately assigned to an individual but have since been released by the original owner and reissued to a new subscriber – to circumvent security measures and commit fraud. It poses a significant risk because it undermines the fundamental trust placed in phone number-based authentication. If you’re using any type of authentication to onboard, process, or otherwise identify your users and customers, this is a potentially major threat.

Think about it like this: when a phone number is recycled, the digital footprint associated with its previous owner typically remains linked to that number. This includes all types of accounts tied to the old number, forgotten MFA settings, or even saved data from past online activities. By acquiring a recycled number, a fraudster gets access to what appears to be a legitimate, tenured phone number – a number with a verifiable history, but one that is no longer associated with its original owner. These numbers, despite their history, are essentially compromised, as they are no longer controlled by the original, verified user.

It allows bad actors to impersonate legitimate individuals, gain unauthorized access to sensitive accounts, and execute fraudulent transactions. The very attribute that was once a signal of reliability – a phone number's established history – becomes a critical vulnerability. They can exploit forgotten accounts linked to the recycled number, bypass SMS 2FA/OTP intended for the previous owner, and even leverage social engineering by appearing as a familiar contact.

Legacy solutions are woefully inadequate at solving this growing threat. Traditional phone number verification often relies on simple checks like number tenure, which, as we've seen, can be easily weaponized by fraudsters using recycled numbers. To effectively solve it, a more comprehensive approach to phone number verification is required and it needs to go beyond surface-level checks.

But first, let’s look at how these types of attacks are manifested.

The Anatomy of a Recycled Number Attack: From Disconnect to Disaster

So, how exactly does this "bad recycling" turn into a full-blown fraud problem? It's not always a complex, esoterically technological process. Quite often, it's more like a digital dumpster dive. Let's walk through a typical scenario, keeping in mind that the exact steps can vary, but the underlying vulnerability remains consistent.

Phase 1: Digital Debris: It all starts with a seemingly mundane event: someone, let's call her "Sarah," changes her phone number. Maybe she moved, switched carriers, or just wanted a fresh start to get away from endless spam calls. What Sarah often doesn't do, however, is meticulously update every single online account tied to her old number. Her bank, social media profiles, streaming services, loyalty programs, forgotten e-commerce sites – many of these still have her old number listed as a primary contact or, crucially, as a 2FA/OTP delivery method. This creates a digital debris field of dormant connections to an otherwise inactive number.

After a period of time (which varies by carrier and region, but can be as short as 45-90 days), Sarah's old number is released back into the wild, ready for "recycling" to a new subscriber.

Phase 2: The Opportunistic Acquisition: Now enters our fraudster, "Mike." Mike isn't necessarily a master hacker with zero-day exploits on his hacker CV. People like Mike are usually just savvy opportunists. Mike will likely do the following:

• Scour Public Interfaces: Some carriers, in their infinite wisdom, still display lists of available numbers online. Mike can browse these, looking for numbers that don't appear to be part of a fresh, sequential block (indicating they've likely been recycled).
• Leverage OSINT/Data Breaches: Combining open-source intelligence (OSINT) with leaked credential dumps from past data breaches, Mike can often cross-reference old phone numbers with exposed PII, looking for numbers that were once tied to valuable accounts. If he sees a number linked to a well-known financial institution or a popular social media platform in a breach, that's a prime target.
• Organized Crime Rings: There’s also a scenario where Mike is part of a sophisticated organized crime ring, where they create fake businesses to gain access to national identity databases and merely look up the previous owner’s identity information from that recycled phone number..
• Direct Acquisition: Mike simply acquires one of these recycled numbers, often through a low-cost prepaid service. He's now the "legitimate" owner of a number with a ghost of a digital past.

Phase 3: The Reconnaissance and Exploitation: With the recycled number in hand, Mike's real work begins. He'll leverage this number to perform the following:

1. Password Reset Requests: Mike goes to Sarah's bank, her favorite e-commerce site, or her social media platform. He initiates a password reset, selecting the "send code to phone" option. Because Sarah never updated her number, the OTP goes directly to Mike's newly acquired recycled number, and with zero friction, he's in. This is particularly devastating since many legacy systems prioritize SMS OTPs as the primary recovery mechanism, often overriding email or other factors if a valid phone number is presented.
2. Account Takeover (ATO): Once inside an account, the possibilities are grim. Mike can change passwords, update contact information (locking Sarah out entirely), drain funds, make unauthorized purchases, or leverage the account for further phishing or social engineering attacks against Sarah's contacts.
3. PII Harvesting & Impersonation: Beyond direct account access, Mike can use the recycled number to probe "people search" services or other public data aggregators. Because the number was previously associated with Sarah, these services may still link it to her name, old addresses, and even relatives. This PII is invaluable for more sophisticated social engineering, identity theft, or even opening new fraudulent accounts in Sarah's name.
4. Persistent Communication Interception: Even without explicit account takeover, Mike might start receiving SMS notifications intended for Sarah – appointment reminders, shipping updates, marketing messages. While seemingly benign, this constant stream of information can provide further clues about Sarah's habits, relationships, and even financial activities, allowing Mike to build a more complete profile for future attacks.

The Underlying Vulnerability: A Flawed Trust Model

The success of these attacks hinges on a fundamental flaw in many organizations' security approach: the assumption that a phone number, particularly one with a history, inherently equates to the current, verified identity of the user. 

At issue is the fact that legacy systems often look only to the tenure of a number, rather than verifying its real-time ownership and reputation. When a number is recycled, this trust model falls apart and it exposes the previous owner to significant risk and handing fraudsters a seemingly legitimate key to a treasure trove of personal data.  

Said another way, companies typically control their authenticators: when to lock them out or when to reissue new credentials. In this case the company doesn’t control or even worse have visibility to when that authenticator (the phone number) is reset and reissued.  It’s no different than a business that issues building access key-cards to an employee but the employee gives the key-card to someone else.

Protecting against this requires moving beyond static checks and embracing dynamic, real-time identity verification that understands the complex lifecycle of a phone number.

Prove's Multi-Layered Defense: Beyond Basic Checks

Organizations need to build a robust strategy to defend against this insidious attack type. Prove has built an identity verification platform that is based on a comprehensive understanding of risk that is informed through multiple facets of a phone number and its associated user. This multi-layered approach gives us a much clearer picture of the actual risk involved in any digital interaction.

Here's how we build that refined picture:

• Reputation Analysis: We don't just look at a number's age; we analyze its entire history. This includes how it has been used over time and real-time device information. By continuously tracking phone activity and data, our Trust Score solution generates a near real-time measure of reputation. This alone is often powerful enough to flag suspicious numbers that might otherwise slip through basic checks.
• Risk Tables: We actively gather and maintain extensive lists of phone numbers known to be associated with fraudulent activities, including those used in "rented" or recycled number schemes. We check against these massive databases in real time to instantly identify and flag known problematic numbers.
• Real-Time Phone Ownership Verification: Even if a number has a decent reputation score, that's not adequate. We go a crucial step further to verify that the person currently using the phone is indeed its actual, legitimate owner. This is key to thwarting recycled number fraud, where the number's history might look clean, but its current possessor is a fraudster.

Prove is the only company that can offer a truly comprehensive and accurate solution to recycled phone number fraud, thanks to our 12+ years of longitudinal phone evidence in the U.S. and more than six years’ worth of data from 50 countries. Our multi-faceted approach analyzes a phone number's reputation, verifies ownership, and identifies primary phone numbers, providing a level of protection that others simply cannot match. Don't let recycled numbers be your organization's next big fraud vulnerability.

By understanding the subtle nuances of phone number usage, device behavior, and network-level interactions, Prove's services significantly mitigate the risks posed by these "new" and evolving scams. Our multi-layered approach, which meticulously analyzes tenure, real-time risk factors, and explicit phone ownership, ensures robust protection against fraud while maintaining a seamless user experience. The continuous refinement of these technologies, powered by expanding behavioral intelligence and cross-network collaboration, is absolutely critical for staying ahead of increasingly sophisticated fraud tactics.