7 things you can do to defeat the cell phone fraudsters: Internet Scambusters #872
Cell phone fraud is rising fast, but some service providers aren't well enough prepared to stop it from costing their customers a fortune.
However, a few careful steps now could help stop you from falling into the scammers' clutches.
In this week's issue, we'll explain the most common types of fraud and give you seven actions you can take to beat the crooks.
Let's get started...
Cell Phone Fraud Soars -- Here's How to Beat It
Cell phone fraud, where scammers leverage an existing phone user's account for criminal purposes, is rising alarmingly.
Latest research shows a 78% year-on-year surge to almost 700,000 incidents. And, in many cases, victims don't find out about the crime until they get contacted by debt collectors.
In the most common type of scam, crooks effectively hijack a user's account by tricking them into handing over a code sent to their phones by their service provider.
For example, they phone a target pretending to be the service provider (having bought the victim's details on the dark web). They tell the user there's a security issue with their account and that they'll be sending a code to the phone, which the user must then read back to them.
At the same time, the scammer contacts the service provider, posing as the customer, requesting a four-digit code so they can verify and access their account.
The phone company sends the code and then the victim gives it to the scammer who can now pass himself off as the customer.
Once this set-up is complete, the scammer can use the victim's identity to acquire new phones and other products to sell. He can also access the victim's account and steal personal information, which can be used to take out credit in their name.
The other tactic is so-called number porting, in which scammers transfer victims' phone numbers to fake accounts they've set up. People who don't use their phones frequently may not discover their line is dead for a few days, by which time crooks have already made full use of information linked to the number.
The trouble is that, unlike other types of fraud, for instance using stolen credit card information, cell phone fraud is so relatively new that a lot of the safeguards available to card users -- and the mechanisms for putting things right -- are not so well-developed.
For example, banks and card companies generally have a policy of limiting losses on defrauded accounts, usually up to $50. Cell phone companies vary considerably in their policies, and victims can end up seriously out of pocket.
"It's also hard to detect, so it can go unnoticed for months," notes consumer champ publication Consumer Reports in a recent online article. "By then, your bank account may be drained, credit card companies may be after you for unpaid bills, and the police may be investigating you for crimes committed in your name."
Edward McAndrew, a one-time federal cybercrime prosecutor, tells the publication that most victims have to spend a lot of time explaining and proving the fraud to their phone companies. The firms need to get their act together.
"Much like credit cards are making efforts to prevent fraud -- because they're on the hook for the loss -- so should cell phone service providers," he says.
And Steven Weisman, a white-collar crime expert, adds:
"While this type of fraud is expanding, the law has not caught up with it sufficiently to provide for liability limits for victims of this type of fraud as we have with credit cards and debit cards."
7 Key Steps
Given this high level of risk, what can you do to avoid falling victim to this growing crime? There are seven key steps.
- Most importantly, you can set up a security password, usually a PIN number, with your service provider that stops anyone else from accessing your account without using the number to confirm their identity. This is quite separate and different from the number the company would send to you for verification, as outlined above. Some providers actually insist you have a PIN in place.
- You can freeze your record with the big credit scoring and reporting agencies. Then, if anyone tries to open an account in your name, the bank or other lending organization won't be able to access your record and therefore won't lend money.
- Service providers also use another organization -- the National Consumer Telecom and Utilities Exchange -- to check your creditworthiness and you can freeze your account with them too.
- You should check your cell phone account regularly -- online if you can. Look out for unidentified charges.
- If you're not a regular cell phone user, you should still check your device for a dial tone every day and contact your service provider if the phone is dead.
- If a caller claims to be from your service provider and asks you to read back a code they sent, don't. Hang up and call the service provider yourself to check whether the call was genuine.
- Protect your confidential financial information. Don't disclose it over the phone. And don't post your phone number online.
Smart phones are now the communication method of choice for many people. As they become increasingly more sophisticated, their value rises, even for stolen items, making them a lucrative target for crooks.
That has also sparked dozens of scams. Check out our earlier report listing 10 of the most common cellphone scams, The 10 Most Common Cell Phone Scams and How to Avoid Them, and read the Consumer Reports article, A Growing Threat to Your Finances: Cell-Phone Account Fraud.
Alert of the Week
Does your camera have Wi-Fi? Bluetooth? If so, watch out. It may be vulnerable to hackers who have devised ways of installing ransomware -- locking up your photos forever unless you pay up.
Avoid these tricksters by switching off these technologies when not in use. And keep your camera's firmware up to date by registering the device on the maker's website and arranging to be notified of any updates.
Time to conclude for today -- have a great week!