Consumers are increasingly ignoring legitimate retail messages, mistaking them for scams. For brands, that hesitation is eroding one among their simplest real-time communication channels, as customers begin to treat nearly every 10-digit text as a possible threat.
FTC Consumer Sentinel Network data shows consumers lost roughly $470 million to text scams in 2025, a five-fold increase since 2020. The surge is blurring the road between legitimate brand messages and increasingly sophisticated, AI-assisted scams.
SMS was long considered a marketing “holy grail,” with open rates near 98%. That trust is now eroding. After a reported 50% surge in scam text messages last 12 months — commonly generally known as smishing — consumers are increasingly defaulting to deleting messages quite than engaging.
For retailers, this consumer response goes beyond missed notifications. It creates a friction tax on the underside line, as customers ignore all the things from fraud alerts to delivery updates — effectively ghosting legitimate brands resulting from declining trust. Hesitation translates into lost engagement and missed revenue, turning that erosion right into a measurable cost for retailers.
Telecom Push to Restore SMS Trust
That shift is forcing a reckoning across retail, warns Ariel Reid, VP for customer experience (CX) at telecommunications firm GCH Technologies. The issue just isn’t just lost sales volume. “It’s the psychological retreat of the shopper,” she told the E-Commerce Times, an issue her team hopes a modernization of the U.S. Short Code Registry will solve.
Reid said her team recently modernized the U.S. Short Code Registry, previously known for the reliability of its five- and six-digit numbers utilized in business-to-consumer texting. GCH administers the centralized database in partnership with the Cellular Telecommunications and Web Association (CTIA).
“As GCH modernizes, the mission isn’t any longer nearly [SMS] deliverability. It’s about rebuilding a circle of trust where the bad guys get blocked, and the great guys actually get read,” Reid said.
In an effort to revive the short code’s credibility, Reid hopes the modernized Registry will save the most useful real estate in e-commerce communication: the smartphone lock screen.
Reid sees the short code revitalization as critical to restoring trust in SMS for e-commerce. She likens the situation to attempting to keep your property secure by locking the back door but leaving the front door open.
“The registration process is establishing a source of truth from the jump. It’s making a mechanism that increases the barrier to entry to return through that front door, but then it’s also giving the ecosystem a spot to bring accountability,” she explained.
Why Short Codes Still Matter
Modernizing the Registry goes beyond a technical update. It’s a security overhaul that mandates brand vetting, creates a trusted pipeline, and supports emerging tech.
The GCH/CTIA registry is one among several industry systems. Every channel has its own process, which creates complexity. Each carrier also has its own process depending on channel requirements, Reid noted.
“There are multiple layers with multiple requirements depending on the channel and the extent of access that channel has to an end consumer,” she explained. “It’s a troublesome problem to try to solve.”
Reid explained that the short code ecosystem assigns a singular identifier to every vetted company. You can not walk out on the road, pick up a SIM card, plug it into your phone, and begin sending traffic from a brief code. You will have to work through a third-party provider to get there.
“So, there’s inherent trust that exists on a brief code since it’s a business that’s texting with you, and the fraud levels within the short code ecosystem are literally very small,” she said.
Nine times out of 10, spam and scams don’t come from the short-code channel for several reasons, including the high entry barrier required to qualify for the vetting and monitoring program. Also, the upfront cost of leveraging a brief code is higher than that of another channels, Reid added, noting that the price makes short codes a premium product.
“A foul guy isn’t going to pay that premium,” Reid said. “Why pay Park Avenue prices when you possibly can try your hand on Fleet Street?”
Smishing Surge Raises Retail Risk
With U.S. e-commerce surpassing $1.4 trillion, fraud is increasingly embedded in on a regular basis shopping behavior quite than large, obvious scams.
FTC-linked evaluation shows 92,452 cases tied to online shopping — about 17% of all reported fraud, or roughly one in six scams — underscoring how on a regular basis purchases are increasingly exploited by fraudsters.
The financial toll continues to rise. Consumers reported roughly $470 million in losses tied to text scams, while legitimate brands lose engagement as trust in messaging channels declines.
Latest research from e-commerce platform Sell The Trend suggests online shopping behavior is creating latest opportunities for fraud. Small, on a regular basis purchases are increasingly getting used as scalable entry points for fraud campaigns.
“Most individuals think scams are obvious, but today they’re built into normal behavior. Persons are buying something small, quickly, and moving on. That’s exactly where fraud matches in,” Rachid Wehbi, founding father of Sell The Trend, told the E-Commerce Times.
“What we’re seeing is a shift. It’s not about big losses in a single moment anymore. It’s about small transactions happening at scale,” he offered.
In accordance with Wehbi, the best approach to avoid a text scam is to slow things down barely. Just taking a moment to envision before buying can prevent most of those fraud cases.
Visual Verification Gains Ground
While GCH is securing SMS’s front door through the Short Code Registry, technology firm Emovid is targeting fraud risks beyond SMS. Its solution uses recorded video messages tied to verified identities, allowing recipients to verify that an actual person — not an automatic or spoofed system — is behind the communication.
Together, the approaches create a two-tiered strategy: vetted messaging pipelines for speed, and verified video interactions for high-trust communication.
Emovid CEO Victor Cho says many firms still treat digital communication as protected by default. But that level of safety isn’t any longer the case.
His company is built on a straightforward premise. AI systems are having access to high-level business communication channels. He contends that adding verifiable human presence — even in asynchronous messages — creates a signal that’s significantly harder for fraudsters to copy at scale.
“With AI-generated messages getting more convincing, the old ways of trusting what you see or read are quickly becoming outdated,” Cho told the E-Commerce Times. “Things like open rates on emails, if it’s not coming from a known de facto trusted source, are plummeting.”
Two-Tier Strategy for Trust
In accordance with Cho, Emovid’s platform addresses that problem by delivering an asynchronous verification layer built around recorded, identity-linked messages.
In practice, that may mean receiving a brief recorded video from a verified sender, where identity markers — equivalent to facial presence, branding, and platform validation — help confirm authenticity before a user engages. Unlike text-based messaging, which will be spoofed at scale, this approach introduces friction that makes impersonation significantly harder.
Cho suggests that companies split their communications into one among two categories. The primary is verified, human-origin communication. The second treats all the things else as potentially an impostor or AI-generated content.
“There’s no reliable approach to confirm the authenticity of that communication,” Cho said.
As trust in digital communication continues to erode, businesses may don’t have any selection but to prove — not assume — that each message is real.