One-Time Passcodes Are Gateway for Financial Fraud Attacks

Report Reveals Growing Trend of Fraudsters Intercepting SMS-Based Verification Suparna Goswami (gsuparna) • April 3, 2026

Financial institutions have historically relied on one-time passcodes as a primary authentication control for their accountholders. But OTP verification is less reliable as fraudsters increasingly exploit SMS-based verification weaknesses to carry out account takeover and payment fraud schemes.

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A new report from threat intelligence firm Recorded Future reveals that attackers are intercepting OTPs to bypass authentication mechanisms, often as part of broader fraud campaigns.

The digitization of the banking industry has ushered in a rise in social engineering scams, with attackers impersonating banks and service providers to trick customers into sharing authentication codes in real time. This shift reflects ...