Unwanted calls are the #1 complaint to the FCC. Even though the government has cracked down on robocalls and phone scams, scammers' tactics continue to evolve. Many scammers are using new technology to falsify their identities and trick people into handing over their personal information. Other scammers are exploiting the phone network itself to take money from you and the phone companies directly. Once just a nuisance, these scams are becoming an increasing threat to our wallets and personal information.

robocalls made in 2016

lost on average per scam

of individuals scammed are millennial males

Scam Victims by Gender and Age Bracket

33%

35-44

45-54

55+

11%

5%

7%

4%

7%

13%

8%

18-34

Younger generations who are falling victim to the most phone scams. Millennials reported being affected by about 3x as many phone scams as those over 45.

Reminders

Polls

Debt

Flights

Refills

Robocalls may be annoying, but that does not make them illegal. Legal robocallers will not try to steal your personal information and rarely will threaten your wallet, unless you have debts to pay. The FCC has clear guidelines for what constitutes a legal robocall, but pending legislation may outlaw them altogether.

Rules for Legal Telemarketing and Robocalls

  1. Calls and text messages have the same protection under FCC rules
  2. Businesses must obtain clear consent before making an auto-dialed call to you
  3. Businesses may not make telemarketing calls to you because you purchased something from them
  4. Consent to be called or texted cannot be a condition of a sale
  5. Telemarketing, informational, political, and other non-emergency robocalls require consumer's permission to be made to a cell phone
  6. Telemarketers must allow you to opt out of additional calls during a pre-recorded call
  7. Non-emergency robocalls are permitted to landline phones without a customer's permission
  8. Market research or polling calls to landline numbers are not restricted by FCC rules
  9. Telemarketers and robocallers are allowed to call a wrong number only once before updating their call lists
  10. Urgent calls or texts for health care or fraud alerts are allowed without prior consent, but they must be free and consumers can say "stop" at any time

Phishing is a cybercrime in which a scammer poses as a legitimate institution to lure people into providing sensitive personal information. Creative use of telecommunications technology, such as VoIP, allow scammers to phish for personal information even more deceptively through landlines and cell phones.

VoIP Explained

VoIP, or Voice Over Internet Protocol is a method for taking audio signals from your phone, and turning those signals into data that can be sent over the internet. This technology allows users to make calls for free using the internet.

Call made from VoIP-enabled phone

Phone signal converted into data

signal  passed back to phone network

Call reaches  destination

VoIP Phone Numbers are a Mask

 Even though VoIP calls travel over the internet, they look the same as regular phone calls to the receiver. VoIP companies assign phone numbers to customers like a mask, so that there is a number that shows up on other peoples caller ID and so that others have a way to call the VoIP customer using a regular phone. The phone number is not restricted by the location of the customer, so any area code can be used. Masking a number with a different area code, or new number entirely, is called spoofing.

Legal VoIP Spoofing

Spoofing is often used by businesses with multiple phone lines to make all outgoing calls look like they're from the same number.  It is also used by physicians who need to call a patients house, but do not want to reveal their phone number, so the VoIP provider can assign a random number to show up on the caller ID.

Exploiting VoIP Spoofing

Scammers can use VoIP spoofing to display any number they want on the receiver's caller ID by hacking VoIP equipment or a larger part of the VoIP network. There are even free services online that allow anyone to make an internet call with a random temporary number.

Neighbor Spoof

Masking a number with a familiar area code is known as a Neighbor Spoof. A scammer can call you from thousands of miles away, but the area code on your phone shows up as your home town. The familiarity of the call makes receivers more likely to pick up the call.

Agency Spoof

Between 2013 and 2016, a spoofed IRS scammed over 5,000 victims who have collectively paid over $26.5 million.

Some scammers hack VoIP equipment and mask their real number with that of an agency, such as debt collectors or even the IRS. IRS scams are especially effective around tax season, when many are worried about filing errors or being audited.

Voice Phishing

Scam callers attempt to steal a voice signature from you, a type of phishing sometimes referred to as "vishing". This scam is often combined with a neighbor or agency spoof.

 

 

In 2017, the FCC alerted consumers of a scam to get victims to say the word "yes" during a call, and later use the recording to authorize charges from the victim's credit card.

Network scammers make money simply by keeping you on the phone line. You may have no idea that you are being scammed during the call. There are two major network scams at work today.  One scam targets owners of 1-800 numbers, the other targets average phone customers. Both scams exploit caller's curiosity to keep them on the line and skyrocket the cost of the call.

Toll-Free Fraud:

Scamming Businesses and the Phone Company

Toll-free 1-800 numbers provide customers a free and convenient way to contact businesses.  Recently, scammers have found a way to exploit an almost 60 year old system and make money from businesses that operate toll-free numbers and the phone company.

How a Toll Free Call Works

When you make a call to a toll-free number, the business that owns the number pays the phone company for the call. The phone company then pays every other phone company that helped make the connection.

Origin

Destination

How the Scam Works

Scammers can profit from this call system by inserting themselves into the network and profiting from toll-free calls that are routed through their tower or relay system.

Origin

Destination

Shady Company

To access the network, a scammer goes to a shady telecommunications company and promises to route a huge number of 1-800 calls through their network, and split the profits from the shady company. The scammer pays essentially nothing for the calls, and the telecommunications company makes a big profit.

How Robocalling is Used

The scammmer uses an autodialer to dial hundreds or thousands of toll-free 1-800 numbers per day. Once the call has connected, the goal becomes to keep whoever answers on the line. The longer the call is, the more money the scamming team can make. The most recent iterations of this scam have played recordings that sound like pocket dialing. This typically makes the person answering curious and they may stay on the line for several minutes.

Ring Once: Scamming You

The Ring Once scams is simple, but can cost a customer hundreds or thousands of dollars for one call. The scam starts as soon as a customer returns an unknown missed call, but the customer may not know they have been scammed until they check their phone bill later.

What the Reciever Experiences:

Your cellphone rings once before the call is disconnected. You don't recognize the number, but it has a U.S. area code so you call back. You hear a message about suspicious activity on your credit card, and to stay on the line for more information. You talk to the operator for a few minutes but realize its actually a phishing scam and hang up.

What Actually Happened:

The scammer on the other end purposely hangs up after only one ring to entice you to call back. The area code that was shown on the screen was actually a 3-digit international area code for Jamaica. The caller unknowingly called an international hotline that charged a fee to connect and premium per-minute rates. The expensive hotline charges profit the scammer.

Funding Organized Crime

Around 2008 group of four men in the Philippines ran a modified version of the ring once scam. Instead of calling and hanging up, the men broke into the phone systems of AT&T customers and made calls to a premium international number. The profits from this scam were used to fund a Saudi-based militant group. The FBI claims profits from the scam funded the 2008 attacks in Mumbai that killed 166 people.

The FCC, FTC, and other government agencies continue to implement new technology and legislation to protect Americans from phone scams. However you can protect yourself by following simple guidelines.

How to Protect Yourself from Scams

  1. Never answer calls from unknown numbers.
  2. Never call back an unknown number from a missed call
  3. If you answer and the caller asks you to hit a button to stop receiving calls just hang up. Scammers often use these tricks to identify, and then target, live respondents.
  4.  If you receive a scam call, write down the number and file a complaint with the FCC
  5.  Ask your phone service provider if it offers a robocall blocking service. If not, encourage your provider to offer one.
  6. Register all of your telephone numbers in the National Do Not Call Registry

Sources:

 

IRS.gov

FCC.gov

FTC.gov

https://voipstudio.com

youmail.com

 

Reply All, episode #104: The Case of the Phantom Caller, by Gimlet Media

Planet Money, episode #789: Robocall Invasion