The free feature will reduce the number of calls customers receive from unknown numbers by providing details of the organisation making the call.
Provided by voice security provider Hiya, the technology gives customers greater peace of mind when answering incoming calls. The tool will act as an anti-fraud filter, only displaying caller information after verifying the company making the call.
The new launch comes as research from Hiya reveals that almost half – 46 per cent – of unidentified calls are ignored, with 92 per cent of people admitting they suspect unidentified calls to be fraudulent.
The technology is being rolled out automatically to millions of O2 pay-monthly and business customers over the coming months, starting with those using Android smartphones. It will also be available to mobile operators who use O2's network, including Tesco Mobile.
Around 150 UK businesses are already signed up to the service, including major banks and insurers.
Murray Mackenzie, director of fraud at Virgin Media O2, said, "As part of our relentless efforts to stop the scammers, we're rolling out next-generation caller ID to provide our customers with reliable information about who is calling before they even pick up the phone.
"By giving them confidence in who is calling and why, customers will be better able to spot fraudulent call attempts and ensure they're only speaking to people and organisations they want to.
"With more than a hundred major UK businesses already signed up to the service, this free feature will help give our customers greater peace of mind."
Kush Parikh, Hiya president, said, "O2 is leading the way in revitalising the value of the mobile phone call experience.
"Offering a free anti-scam solution is the response that every carrier in Europe should be taking, as it is the only way to ensure that all subscribers are protected without leaving coverage gaps that fraudsters can exploit. We are proud to partner with O2 for call protection and branded calling across the UK."
The new tool follows large investment from O2 in recent years to keep its customers safe from fraud, with the new service due to run alongside existing fraud protection measures. This includes AI-powered spam text detection technology which has prevented more than 89 million fraudulent texts from reaching customers in 2023 alone.
Later this year, O2 will also introduce Call Defence, a free AI-powered spam fighting tool to help further protect mobile customers from fraud. Hiya’s Adaptive AI system will analyse a call number behaviour to determine whether a call is suspected scam or spam labelling the call accordingly and thereby helps keep customers safe from scammers.