Phone fraud: stolen accounts warning as scammers strike

First they take your phone number, then clean out your bank account. A new report highlights a dangerous smartphone reality.

Australians’ phone accounts are increasingly being hacked by scammers who steal control of their numbers, personal information and bank details.

A new report by the Telecommunications Industry Ombudsman has examined the “devastating” impact the practice is having on consumers and warns that some mobile providers’ security processes are poor.

Hijacking phone accounts has enabled fraudsters to order new handsets and steal mobile numbers by transferring them to a new SIM card, which can then unlock more sensitive personal data usually protected by two-factor authentication.

“In many cases, the stolen mobile number was used to gain access to their bank account or other accounts such as email or MyGov,” the report says.

“Some consumers said they only realised they were a victim of fraud when they applied for a home loan, which was rejected because they had a default recorded on their credit file.”

Fraudsters typically contact a telco provider, using information they already have about you, and exploit weak security processes and slow responses to account breaches, the report says.

Telecommunications Industry Ombudsman Judi Jones. Picture: Ian Currie

Ombudsman Judi Jones said phones were now “a little minicomputer that we live our lives on” and were often used as verification tools to log into secure accounts and platforms.

“If you’re not receiving that one time PIN, you’re not in control of who’s getting access,” she said.

“Often how you find out if they have done a SIM swap is that you just can’t use your phone anymore because they’ve put the number on a different card,” she said.

“Criminals are the ultimate innovators. So we can’t say ‘if you do this you’ll be safe’. You’ve got to be alert.

“Don’t’ give out your personal information over the phone. If it sounds weird, hang up.”

The Australian Competition and Consumer Commission recently revealed reports of scams originating over the phone had surged 74 per cent this year to 126,000, with total losses up 87 per cent to $236 million.

ACCC deputy chair Delia Rickard said the increasing number of phone account SIM swap scams was “way too many”, and work was being done to improve providers’ security.

“The identity verification processes are not tight enough – if suddenly your phone stops working for no apparent reason, call your telco immediately,” she said.

“Often the scammers will have information about the person already, and all they need is the SIM swap to get the SMS to access somebody’s bank details and clean out their bank account,” she said.

“If you have been a victim of this the best place to get help is idcare.org (phone [phone]). They’re a free service and they’re amazing because this can be a nightmare to undo.”

Telco specialist Alex Choros from WhistleOut.com.au said the pandemic had caused an increase in phone scams as online shopping boomed and messages about missed deliveries seemed more convincing.

He said control of your phone account helped criminals facilitate password resets on other accounts.

“If a criminal has access to your phone account, they’ll get that text message instead of you, and that gives them a critical piece of information for logging into your account,” he said.

Originally published as Phone fraud: stolen accounts warning as scammers strike