Consumers are increasingly ignoring legitimate retail messages, mistaking them for scams. For brands, that hesitation is eroding one of their most effective real-time communication channels, as customers begin to treat nearly every 10-digit text as a potential 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 line 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 year — commonly known as smishing — consumers are increasingly defaulting to deleting messages rather than engaging.
For retailers, this consumer reaction goes beyond missed notifications. It creates a friction tax on the bottom line, as customers ignore everything from fraud alerts to delivery updates — effectively ghosting legitimate brands due to declining trust. Hesitation translates into lost engagement and missed revenue, turning that erosion into a measurable cost for retailers.
Telecom Push to Restore SMS Trust
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That shift is forcing a reckoning across retail, warns Ariel Reid, VP for customer experience (CX) at telecommunications firm GCH Technologies. The problem is not just lost sales volume. “It’s the psychological retreat of the customer,” she told the E-Commerce Times, a problem 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 used in business-to-consumer texting. GCH administers the centralized database in partnership with the Cellular Telecommunications and Internet Association (CTIA).
“As GCH modernizes, the mission is no longer just about [SMS] deliverability. It’s about rebuilding a circle of trust where the bad guys get blocked, and the good guys actually get read,” Reid said.
In an effort to restore the short code’s credibility, Reid hopes the modernized Registry will save the most valuable 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 trying to keep your home 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 is creating a mechanism that increases the barrier to entry to come through that front door, but then it’s also giving the ecosystem a place to bring accountability,” she explained.
Why Short Codes Still Matter
Modernizing the Registry goes beyond a technical update. It is a security overhaul that mandates brand vetting, creates a trusted pipeline, and supports emerging tech.
The GCH/CTIA registry is one of 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 level of access that channel has to an end consumer,” she explained. “It’s a tough problem to try and solve.”
Reid explained that the short code ecosystem assigns a unique identifier to each vetted company. You cannot walk out on the street, pick up a SIM card, plug it into your phone, and start sending traffic from a short code. You have to work through a third-party provider to get there.
“So, there is inherent trust that exists on a short code because it’s a business that is texting with you, and the fraud levels in the short code ecosystem are actually very small,” she said.
Nine times out of 10, spam and scams do not 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 short code is higher than that of some other channels, Reid added, noting that the cost makes short codes a premium product.
“A bad guy isn’t going to pay that premium,” Reid said. “Why pay Park Avenue prices when you 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 everyday shopping behavior rather than large, obvious scams.
FTC-linked analysis shows 92,452 cases tied to online shopping — about 17% of all reported fraud, or roughly one in six scams — underscoring how everyday 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.
New research from e-commerce platform Sell The Trend suggests online shopping behavior is creating new opportunities for fraud. Small, everyday purchases are increasingly being used as scalable entry points for fraud campaigns.
“Most people think scams are obvious, but today they’re built into normal behavior. People are buying something small, quickly, and moving on. That’s exactly where fraud fits in,” Rachid Wehbi, founder 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.
According to Wehbi, the simplest way to avoid a text scam is to slow things down slightly. Just taking a moment to check before buying can prevent most of these 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 confirm that a real person — not an automated 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 companies still treat digital communication as safe by default. But that level of safety is no longer the case.
His company is built on a simple premise. AI systems are gaining access to high-level business communication channels. He contends that adding verifiable human presence — even in asynchronous messages — creates a signal that is significantly harder for fraudsters to replicate 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
According to Cho, Emovid’s platform addresses that problem by delivering an asynchronous verification layer built around recorded, identity-linked messages.
In practice, that can mean receiving a short recorded video from a verified sender, where identity markers — such as facial presence, branding, and platform validation — help confirm authenticity before a user engages. Unlike text-based messaging, which can be spoofed at scale, this approach introduces friction that makes impersonation significantly harder.
Cho suggests that businesses split their communications into one of two categories. The first is verified, human-origin communication. The second treats everything else as potentially an impostor or AI-generated content.
“There’s no reliable way to verify the authenticity of that communication,” Cho said.
As trust in digital communication continues to erode, businesses may have no choice but to prove — not assume — that every message is real.
