Israel Debates Stricter Mobile Porting Rules Amid Bank Fraud Concerns

Financial institutions in Israel are pushing for stricter regulations on mobile number porting, arguing it's crucial to protect customer accounts from unauthorized access. A significant dispute has erupted between Israeli banks and the Ministry of Communications over methods to combat cyber fraud, where criminals hijack phone numbers to intercept SMS verification codes. The conflict centers on security approaches, the costs of implementing safeguards, and maintaining market competition.

The fraudulent scheme involves illegally transferring a subscriber's phone number to a different mobile operator. Once in control of the SIM card, criminals can intercept one-time SMS passwords used for accessing bank accounts and credit card applications. The Association of Banks advocates for stringent measures, proposing mandatory additional identity verification immediately after number porting, coupled with a temporary block on receiving banking confirmation codes.

The Ministry of Communications opposes this, contending that such barriers would impede customer mobility between providers and harm competition in the telecom market. To resolve the deadlock, the ministry has formed a working group with the Bank of Israel. Their proposed technological solution involves granting banks and credit card issuers secure access to a centralized database. This would allow financial systems to verify in real-time if a number porting occurred recently. If a suspicious transfer coincides with unusual account activity, the system would trigger enhanced identification instead of vulnerable SMS confirmation.

The primary obstacle to this plan is funding. The Ministry of Communications insists that commercial banks and credit companies should bear the costs of servers and infrastructure. However, financial entities refuse, continuing to demand legislative restrictions on number porting. Sources suggest banks are attempting to shift fraud prevention responsibility to the state. The ministry also points out that more robust biometric and digital identification technologies already exist, but banks are reluctant to adopt them due to high costs, leaving customers exposed to cyber threats.