A Florida dentist lost $400,000 from his retirement account last year in this manner, and the FBI said the attacks are growing.
A spokeswoman for the Communication Fraud Control Association — a telecom industry organization — told Threat Level that although fraudulent transfers have been halted in a number of cases, the losses are increasing.
“I know it’s in the millions,” said Roberta Aranoff, executive director of the CFCA. “It has exceeded a million dollars easily.”
Last November, Robert Thousand Jr., a semi-retired dentist in Florida, received a flood of calls to several phones. When he answered them, he heard a 30-second recording for a sex hotline, according to the St. Augustine Record.
In December, he discovered that $399,000 had been drained from his Ameritrade retirement account shortly after he’d received the calls. About $18,000 was transferred from his account on Nov. 23, with a $82,000-transfer following two days later. Five days after that, another $99,000 was drained, followed by two transfers of $100,000 each on Dec. 2 and 4. The thieves withdrew the money in New York.
Thousand’s son, who shares his name, received similar harassing calls, though his financial accounts were not touched. Thousand did not respond to a request from Threat Level for comment.
The FBI says the calls were a diversionary tactic, meant to tie up Thousand’s line so that Ameritrade couldn’t reach him to authenticate the money transfer requests. FBI spokesman Bryan Travers said AT&T, Thousand’s phone carrier, contacted the agency’s New Jersey office to help investigate the matter. The agency has since seen at least 16 similar cases since November, most of them occurring in the last few weeks.
In some cases, the victims simply heard dead air when they answered their phone or heard a brief advertisement or other recorded message. Some victims had to change their phone numbers to halt the harassing calls.
The perpetrator who targeted Thousand created a number of VoIP accounts, which were used with automated dialing tools to flood the dentist’s home, business and cellphone with calls.
Generally in these cases, Travers said, the thief obtains the victim’s account information through some other means — perhaps through a phishing attack or other method — and then contacts the financial institution to change the victim’s contact information. In this way, the institution will call the thief instead of the victim to verify a money transfer request.
Many banks, however, now contact customers at their previous phone number when contact information on their account has changed.
But with these attacks, the institution’s calls are prevented from reaching the victim, whose phone is tied up with a flood of diversionary calls.
AT&T spokesman Marty Richter told Threat Level that the perpetrators then generally contact the financial institution posing as the victim to complain that a requested money transfer hasn’t gone through. When the institution discloses that it tried unsuccessfully to contact the victim to authenticate the transfer, the perpetrator says he’s been having phone troubles and verifies that the transfer should proceed.
Richter says that other telecommunication companies have been alerted to the problem and are warning customers when they call to complain about harassing calls that the issue may be related to their financial accounts. The victims are warned to place fraud alerts on their financial and credit bureau accounts and block any electronic fraudulent money transfers that may be in the works.
“This may appear to some people that they’re just having a connect issue with their phone carrier,” he said, “and we want to alert them that this may not be the case.”
Travers said that in most cases so far, the victims have acted quickly enough to prevent money from being drained from their accounts, but he says there may be many other cases that haven’t yet been reported to the FBI. He urged consumers who may have been victims to contact the FBI.
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By Kim Zetter
