Telephone Call Offering to Lower Interest Rate is a Scam!

Cheap long distance, the ability to spoof caller ID and the credit crisis are being used to facilitate a scam called vishing. Although telephone (telemarketing) scams are nothing new, the term vishing probably came about because advances in telephone technology are being used to depart unsuspecting people of their hard-earned money.

The term vishing was coined from the word phishing. Internet scammers phish the waters of the Internet using spam e-mail as bait. Once a person falls for their "too good to be true" lure -- personal and financial information is stolen using social engineering (trickery) or malicious software designed to data-mine the information right off the infected machine. The personal and financial information is then used to commit financial crimes, which is often referred to as identity theft.

In the past week, I've received several calls where a computerized voice informs me that the offer to lower my interest rate is almost over. It then says to press "1" if I want to lower my interest rate.

I went ahead and pressed the number "1" to see what this "too good to be true" offer was all about. After a few seconds, a female voice came on and asked me if I was interested in lowering my interest rate. I told her I was and she asked me for the 800 number of my financial institution so she could verify my eligibility. Since this is public information, I went ahead and gave one to an institution, I no longer do business with. While I was digging up the number on the Internet, she made a lot of inquires about how many lines of credit I was behind on. After providing her with the 800 number, she asked me to give her all the credit card numbers that I wanted to lower the interest rate on.

At this point, I had very little doubt I was dealing with a scam designed to steal credit card numbers. At no point did she identify a financial institution -- and besides that -- no financial institution would make a cold call and ask for credit card numbers. Additionally, when was the last time a financial institution offered to lower an interest rate to an existing customer unless they were being bailed out by the government (taxpayer)?

I asked if she felt good about ripping people off and if I could speak to her supervisor. Of course, I was never referred to a supervisor and after cursing at me, she hung up. Trust me, from the vulgar language that was expressed, this call was not being recorded for training purposes!

In the past couple of years, we've seen reports of vishing. In the case, I'm writing about a dialer system is obviously being used. Dialers are used by collection agencies, telemarketing companies, political campaigns and even charities to direct calls to live employees. Basically, dialers screen the calls via computer to make the process more efficient.

Having never priced one, I decided to see what Google had to offer. I found them to be rather inexpensive starting at a mere few hundred dollars. There were also options to use already set-up systems on a cost-per-call basis.

Caller-ID spoofing services can be purchased legally and are used by a lot of legitimate companies to entice us to pick up calls. Because of this, it is probably wise not to put your faith in caller-ID.

Some blame VoIP (Voice over Internet Protocol) technology for vishing. VoIP has made calling long distance cheap.

So far as where the victim lists are obtained, they can be easily purchased. My phone number has been unlisted for over 20 years, but information brokers data-mine information from every source imaginable, including magazine subscriptions. Since these lists are worth money, companies who gather information routinely sell the marketing information they gather on all of us. It also isn't unknown for dishonest employees to sell information directly to criminals. Often this is done right on the Internet in chat rooms, which keeps the transaction fairly anonymous.

Recently, the FBI announced that they stung an Internet forum used to sell stolen information known as Dark Market. At it's peak, the group had 2500 registered members and it is estimated that they prevented losses of $70 million (worldwide) by cracking this case.

Even the IRS and Social Security have been impersonated in the past two years in vishing schemes.

InsideCRM magazine recently published an article detailing 50 ways to protect your privacy. This magazine represents the call center industry and has a stake in fighting vishing activity, which gives legitimate e-commerce a black eye. If you (like a lot of us) enjoy the hassle-free environment shopping at home, the article is a great educational resource.

The U.S. government has also set up a highly visual and interactive site to educate people about crimes being enabled by technology. Please note this site is available in Espanol, also.

While both of these sites are designed to cover computer security issues in addition to telecom type scams, we need to remember that a lot of these scams probably started before telephones or computers made them easier to do, as well as, more efficient.

Scams rely on human emotion and greed. Knowing this is the best way to prevent yourself from becoming a victim. The "too good to be true" principle coupled with "does the transaction make sense" is the best way to figure out whether an offer is legitimate or NOT!

Phishermen use call-forwarding scam to avoid detection when bank notes suspicious activity

Most of get a lot of phishy e-mails requesting personal and financial information from criminals pretending to be a trusted brand. Now they are adding a devious twist designed to beat fraud detection software, which is used by a lot of companies as a means to detect fraudulent transactions, early on.

Herb Weisbaum of KOMOTV.com (Seattle) reports:

The mass e-mail I saw claimed to be from Bank of America -- big banks are a prime target for these scams because they have so many customers.

The e-mail says, "During our regular update and verification we could not verify your current phone number. Either your information has been changed or it is incomplete.

"The message tells you to confirm your phone number right away “or your account will be suspended indefinitely.”

Not only are you supposed to give them you phone number, you're instructed to forward your calls to the Bank of America Security Department, and they give you that number.

Herb's full story, here.

When the institution notes suspicious activity and calls, the now forwarded call goes to the scammer, who assures them "all is well."

Call-forwarding being used to defraud people isn't exactly new, but this is a new twist. In the past, scammers have called the telephone company and told them that a business line was having problems, then instructed them to forward the call to another number (theirs). This is normally done to businesses, who accept payment information over the telephone.

Of course, the goods, or services are never received and the information is later used for criminal purposes, or to steal money.

This practice is enabled by telephone companies not verifying (authenticating) information when a call forwarding request is placed. Most telephone companies allow the owner of a line to protect it with a password, however unless the owner does so, they are open to this sort of attack.

It's probably a good idea (especially for businesses) to have a password placed on their account!

Consumer Affairs wrote about another variation of the call-forwarding scam -- which is designed to charge the victim for long distance calls (possibly used by fraudsters, or even inmates to commit crimes) -- where the victim is tricked into call-forwarding their number.

Note that the command for call forwarding at most telephone companies is "72#" or "*72," then the telephone number. The inmate or fraudster will normally pose as a telephone tech, who tells you there is a problem with the line. Call-forwarding can be disabled by entering "72#" or "*72."

Please note, at some businesses, the command is "90#".

This scam is frequently used by prisoners in correctional institutions to make free calls and targets both personal and business lines. Another good reason for businesses to password protect their telephone account and consider disabling call forwarding. Most telephone companies charge extra for this service, anyway.

Consumer Affairs story, here.

David Napstead, The Story of a Small-Time Con Man

Normally, I write about big name fraudsters, but there are a lot of small-time crooks out there committing fraud on a daily basis. When you add up the amount of misery caused by these fraudsters, they cause a lot of suffering to hard working people. My friend, Paul Young of Prying1 wrote me about one of them, David E. Napstead.

Napstead in the past has offered nonexistent cellular services to his unsuspecting victims. Like most of the flim-flam men out there, he has phony business cards and a cell phone to conduct business.

Please note, that setting up a phony website is also becoming very common.

A recent comment on Paul's blog indicated that Napstead had been arrested after setting up a phony "debt consolidation" business and bilking those who already were suffering financial difficulties.

Pardon my "French," but what a "dirt bag!" Napstead is no "Robin Hood."

For the full story from Prying1, link here.

If you have been the victim of Mr. Napstead and the crime is yet to be reported, the Las Vegas Police Department might be interested.

Fraud come-ons from people lacking morals surround us, daily. They are found posted on telephone poles, newspaper classifieds - and of course - on the Internet. Because of the "sheer volume" of scams that exist out there (sadly enough) law enforcement lacks the resources to bring a lot of these small-time criminals to justice.

When you are dealing with an "unknown operator" of a business, it pays to do your homework before giving them one "solitary penny."

Here are some resources to do your homework:

Consumer World: Consumer Agencies

Better Business Bureau: BBB.

Quite frequently, a common mistake made (when doing your homework) is that if no information comes up (negative or positive); someone assumes the entity they are "checking out" is legitimate.

If you can find no information - whatsoever - do as Paul suggests in the theme of Prying1: "Dig a a little deeper" before giving up any of your hard earned money.

Here is a previous post - I wrote - specifically on that thought:

BBB Worker Takes Job Processing Fraudulent eBay Transactions