Online cybercrime sometimes concludes with phone fraud, a multimillion-dollar underground enterprise that often targets financial institution call centers to cash in on bank account and other personal information pilfered online. Phone fraud racked up an average of $42,546 in losses per financial account in the first half of 2013, according to new data released today.
One in every 2,500 phone calls to a financial institution call center is a fraud, and each phone fraud call incurs a loss of 57 cents, the report by Pindrop Security says.
"Fifty-seven cents per call surprised us significantly," says Vijay Balasubramaniyan, CEO at Pindrop Security. "If you're a call center getting 1 million calls, that's $570,000 in phone-based account takeovers. We didn't realize it would be that high.
"We're seeing fraudsters stepping up their games, calling these call centers so well-prepared, and going after accounts with a lot of money in them."
Organized crime rings that perpetrate phone fraud use a blend of social engineering and account manipulation to steal money via wire transfers, account clearinghouse (ACH) transactions, and payment cards. Most of these attackers -- 57 percent -- work in groups of two to 12 people, and about half place calls from mobile devices, one third from voice-over-IP lines, and nearly 15 percent from landline phones.
The typical phone fraudster goes after anywhere from a handful of accounts to hundreds of them, Pindrop says. Many of these actors also have a strong online presence and operate across both the Internet and phone channels of attack.
"They may take over an account online, but they can also get as much information from an online channel and when they have to ... steal money, they actually move to the phone channel," Balasubramaniyan says.
Financial institutions are an obvious target for the attackers, who often conduct online reconnaissance before placing the calls to cash in.
Pindrop says one of the most active phone fraud rings it has seen, nicknamed "West Africa One," includes 12 callers who spoof U.S. phone numbers and conduct fraudulent wire transfers and ACH transactions. The gang has been known to have stolen more than $1 million from one financial institution, and are infamous for placing a high volume of calls to their targets.
Meanwhile, consumers also are getting hit by phone fraud. Pindrop says there were 2.3 million consumer complaints about these calls in the first half of this year -- up from 2.4 million complaints in all of 2012. Nine of the top 10 financial institutions were spoofed in 73,000 complaints filed by consumers of their financial institutions being impersonated.
Pindrop's full report is available here here for download.
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