One of the key reasons for a registrant to keep their domain name contact information, also known as WHOIS data, up-to-date is so their registrar can contact them. The other is so the registrant can receive notifications of changes to the contact information, so they can be verified, particularly if malicious actors have tried to take control of your domain.
The advice is in the first of a series of articles published by ICANN on their blog on what you need to know if you have a domain name.
On why contact information needs to be kept up-to-date, Trang Nguyen, Vice President of GDD Strategic Programs writes:
When your domain name registration is about to expire, the registrar is required to notify you. This is typically done via email. If your registrar is unable to reach you because your contact information is not up to date and your domain name registration expires, it may take considerable time and expenses to recover, or it may not be recoverable at all.
Another important reason to keep your contact information up to date is to ensure that you receive notifications from your registrar when changes are made to your domain name registration. These notifications are for your protection, so that you can verify and confirm the validity of the changes made, or take appropriate measures in the case of unauthorized changes. Bad actors can use malicious means to gain access to your account and make changes to the information associated with your domain name registration to lock you out of your account and hijack your domain name. It is important to keep your domain name registration contact information up to date to protect yourself or your business.
If the information given by registrants is wrong on purpose, or registrant information is not updated promptly if there is a change, “your registrar can suspend or even cancel your domain name registration. This could also happen if you don't respond to inquiries by your registrar if they contact you about the accuracy of your contact information.”
If any of your contact information (email, postal address, phone number, etc.) changes, contact your registrar to update your information. The annual reminder email that you receive from your registrar is a requirement under the ICANN WHOIS Data Reminder Policy (WDRP), but do not wait for this reminder. If there's a change, it's important that you update your contact information as soon as possible to prevent disruption or loss of your domain name registration. ICANN cannot update your contact information for you; you must contact your registrar to do so.
Due to the prevalence of security concerns such as phishing attacks, if you have any doubt or questions about the legitimacy of emails about your WHOIS data, you can always contact your registrar directly. If you believe you haven't been receiving reminder emails from your registrar, you can contact ICANN at firstname.lastname@example.org.