Business and user adoption rates of mobile technology and commerce are growing exponentially. While more and more businesses and customers interact without ever seeing one another face-to-face, fraudsters are developing new and sophisticated ways to exploit this relationship for their own gain. From rerouting phone calls to fraudulent centers, to cloning SIM cards and completing transactions under an assumed identity, mobile fraud is on the rise. As such, organizations and financial institutions must inform customers on the risks of mobile banking and ecommerce, while also strengthening identity verification measures. Here are some emerging areas of mobile fraud to become familiar with and tips for keeping fraudsters at bay.
Mobile porting occurs when a fraudster has a consumer’s mobile phone redirected to their device. This is done to get additional information that allows criminals to access bank accounts to commit fraud. Fraudsters only need to know a victim’s name, address, date of birth and mobile number to port, which can be acquired through a data breach or purchased on the dark web.
Once the number is ported, fraudsters can request a one-time password from a bank online, and intercept the text message, then logging into an account and bypassing security. It is recommended that customers do their part to protect their information by shredding mail and other documents with sensitive information, while banks and other organizations implement more secure verification methods that go beyond usernames and passwords.
Cell Phone Cloning
Beyond mobile porting, criminals have also developed the ability to make exact clones of smartphones. This allows them to make and receive calls, rack up charges and listen in on conversations, all without the knowledge of the victim. It is yet another technique fraudsters use to collect data on their victims to commit crimes.
According to an article by Movzio, the Cellular Telecommunications Industry Association (CTIA) estimates that financial losses due to cloning fraud in the United States are between $600 million and $900 million. For businesses, this means that fraudsters are using cloned phones to pose as a legitimate user when accessing mobile platforms such as online banking and making payments for products.
Cell Phone Recycling
Recycling old cell phones is becoming a popular way for consumers to help the environment while also making money on used devices. The trouble with cell phone recycling is that not everybody who discards an old phone or tablet knows where their device will end up. Many are unaware of the steps to take to properly secure and scrub the device before recycling. As a result, scammers get their hands on phones that have not been erased and gain access to personal information left on the device.
Another emerging tactic used by criminals is voicemail fraud. This occurs when an individual or business doesn’t change the default passcode on a voicemail system or has an easily guessed passcode. Hackers call into voicemail systems searching for these numbers, so they can modify the passcode and set up the number to receive long distance and international collect calls. If businesses do not have employees regularly change passcodes, this can lead to exorbitant charges to the company.
Fraudsters deploy all of these methods on a daily basis. By increasing identity verification and fraud prevention platforms, organizations are able to do their part by making it difficult for criminals to access systems with minimal identification credentials. Knowledge based authentication with out-of-wallet questions and risk scoring helps businesses collaborate to eliminate fraud while reducing friction for legitimate customers. Learn more about IDology’s collaborative fraud network, and schedule an online demonstration, by contacting a representative today at (866) 520-1234.