Identifying unknown callers is a key part of a business phone system. It helps businesses separate legitimate calls from potential scams and nuisance calls and proactively manage incoming communications. It also gives businesses the ability to elevate their customer experience, leave a professional impression and more.

Caller identification (or CID) is a telecommunications technology that allows the recipient of a call to see the calling party’s phone number on their phone or mobile device. It also shows the caller’s name, if that information is available and has been provided by the calling party. Caller ID can be used for both cellular and landline phones and works using an Automatic Number Identification (ANI) service, which transmits a caller’s number and sometimes other information to the receiving phone before the call is answered.

How Caller ID works

The basic technology behind caller identification is remarkably simple. It uses a technique called Frequency Shift Keying to send data on the line. One tone (or frequency, like 1,200 Hertz) represents a binary 1 and another tone (like 2,200 Hertz) represents a binary 0. The caller’s phone carrier then displays the name of the calling party based on this data. This is typically done by using a third-party service called a CNAM or calling name directory.

However, these CNAMs are not regulated and the resulting display of names can be inaccurate. Additionally, there is no standard regarding how a name should be associated with a caller’s phone number, so the displayed information can vary. Moreover, caller ID can be spoofed by malicious actors who want to hide their identity and avoid being flagged for spam.