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Attacks/Breaches

11/18/2014
04:10 PM
Sara Peters
Sara Peters
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'Misdial Trap' Phone Scam Hits Financial Services

One in six financial institutions victimized by this new scam.

Pindrop Security today warned financial institutions and their customers about a telephone scam they've dubbed the "misdial trap."

Fraudsters buy phone numbers similar to legitimate businesses, and pose as that business's customer service line when customers misdial -- not unlike how some fraudsters buy domain names similar to legitimate online businesses and create sites that mimic them, according to Pindrop.

The numbers fraudsters typically choose will have the same first six digits as the legitimate business, with only the final digit changed, or they will have the same seven-digit number but a different area code -- a toll-free number area code, for example.

When they hook a customer, they pretend they are customer service for the company in question and request sensitive data from customers -- sometimes offering a free gift card in exchange.

Some 103 of the 600 financial institutions examined by Pindrop Security were affected by the misdial trap.

"Phone fraud costs banks and financial institutions nearly $2 billion every year and fraudsters continue to develop new attacks to steal from consumers and financial institutions," said Vijay Balasubramaniyan, co-founder and CEO of Pindrop Security. "The misdial trap scam is just the most recent example of how sophisticated fraud rings are exploiting inherent vulnerabilities in the phone channel to collect consumer information and defraud financial institutions."

Sara Peters is Senior Editor at Dark Reading and formerly the editor-in-chief of Enterprise Efficiency. Prior that she was senior editor for the Computer Security Institute, writing and speaking about virtualization, identity management, cybersecurity law, and a myriad ... View Full Bio

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vnewman2
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vnewman2,
User Rank: Strategist
11/19/2014 | 1:44:50 AM
Cyber squatting but for phones
So it's telesquatting then. It's pretty clever actually. This is the first time I'm hearing of it. So what is the solution? Unlike websites you can't as easily monitor or pull the plug on a phone number before a boatload of damage has been done.
StudiousMonkey
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StudiousMonkey,
User Rank: Apprentice
11/19/2014 | 2:58:53 PM
Clever
Various phone scammers and prank callers have used this technique for years.

Check out the "Touchtone Terrorists". This guy (Pete Dzoghi) made a living telesquatting many of the major courrier services like UPS and FedEx, as well as other organizations and companies. He would pose as various disgruntled customer service agents to ultimately get a huge rise out of the unsuspecting customer who had dialed the wrong number. He recorded these calls and sold them through retail channels.

Although the end result and goal are not the same, the concept has been around for years.
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