Wednesday, October 28, 2009

Internet Phone Systems Become the Fraudster's Tool

Cybercriminals have found a new launching pad for their scams: the phone systems of small and medium-sized businesses across the U.S.

In recent weeks, they have hacked into dozens of telephone systems across the country, using them as a way to contact unsuspecting bank customers and trick them into divulging their bank account numbers and passwords.

The victims typically bank with smaller regional institutions, which typically have fewer resources to detect scams. Scammers hack into phone systems and then call victims, playing prerecorded messages that say there has been a billing error or warn them that the bank account has been suspended because of suspicious activity. If the worried customer enters his account number and ATM password, the bad guys use that information to make fake debit cards and empty their victim's bank accounts.

Hackers made headlines for breaking into phone company systems more than 20 years ago -- a practice that was known as phreaking -- but as the traditional telephone system has become integrated with the Internet, it's creating new opportunities for fraud that are only just beginning to be understood.

VoIP (voice over Internet Protocol) hacking is "a new frontier in the crossover world of telecom and cyber [crime]," said Erez Liebermann, assistant U.S. attorney for the district of New Jersey. "It is an ongoing threat and a serious threat that companies need to be worried about."

PC World

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