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Scammers who tie up your phone lines may be trying to drain your accounts

by: Sid Kirchheimer, from: AARP Bulletin, July 19, 2010

— Ryan McVay/Getty Images

Have a look at our Scam Alert archive for past warnings about the con artists who too often seek to part Americans with their hard-earned money.

Is your telephone ringing off the hook, with a seemingly endless barrage of calls that include “dead air” or prerecorded messages and advertisements? Consider those calls possible warnings of a new way to hijack your savings and investments.

In this scam, criminals use automated dialing programs to flood your landline and cellphones with calls. The intent, according to the FBI, is to tie up your lines while the crooks empty your bank and online stock accounts. That way, when the anti-fraud departments at your financial institutions try to call you to verify the transactions, they can’t get through and may let the transactions proceed.

In one case several months ago, a semiretired dentist in Florida lost $400,000 from his retirement account through such a scheme. After that, the FBI reports, there was a “noticeable surge” in this ruse, particularly in eastern states.

How it works

The scam begins with crooks targeting you for information about your financial accounts. They may send you an enticing link by e-mail or post one on a legitimate website. If you click on it, your computer becomes infected with malware, which may include a program known as a keystroke logger that gives crooks your account numbers and passwords. Or you may inadvertently supply such info yourself, by responding to calls or e-mails alleging to be from a government agency, or by telling too much about yourself on a social networking website trolled by crooks.

By knowing your name, age and address and employing some creative subterfuge, the crooks may be able to purchase your Social Security number at legitimate websites that service police departments, or companies doing background checks on prospective employees.

With the necessary personal data in hand, the scammers then pilfer your accounts, shielded by a barrage of automated calls to your phone lines. They may even alter your online accounts to a new phone number—in reality, the crooks’ own number—for “verification” of future transactions.

Protect yourself

Here’s how to protect yourself if you get these multiple calls, most of them having no live voice:

First, contact your bank, credit card companies and retirement account managers. Mentioning this new scam, you should insist that the firm persevere in reaching you by phone or e-mail before letting any unusual transactions go through.

Report the suspicious calls to your telephone provider. A trace may be placed on your line to track the calls’ origin.

Change your account passwords. (You should change them regularly anyway to prevent other scams.)

Consider placing a fraud alert or freeze on your credit report. With a fraud alert, lenders are supposed to contact you by phone whenever new credit is applied for in your name.

A freeze is stronger, preventing access to your credit report. Until your report is “thawed, through a PIN access or by filing paperwork, neither you nor an identity thief can get credit in your name. This means that a freeze might not be the best route if you’re shopping for insurance, are moving and need utility service, or are planning to apply for a loan. Learn more about freeze policies in your state at a Consumers Union webpage.