Cell phone financial fraud – often an inside job

By Greg Wright

MBA, CFE, CFP®, CLU, ChFC

Certified Fraud Examiner

National Speaker

Increasingly, financial fraud victims report a scam in which their cell phone number is transferred to a new carrier without their knowledge, and financial accounts were then looted.

Once the cellphone number has been “ported” (transferred) to another carrier, the fraudster can gain access to the victim's various financial accounts by claiming to have forgotten their password and requesting a password reset via text message. He doesn’t physically need your phone to do this.  Moreover, if it is at night, you’ll be asleep . . .

The fraudster then changes your password, gains access to your financial accounts, and begins transferring money out of your banking, retirement and securities accounts. The fraudster acts quickly before you notice.

Because of the increased frequency of this scam, it may not be that you lost your cell.  Often, an accomplice employed by the cellular network contractor may have been used.  Yes, often it is an inside job.

My advice is to avoid using portable devices to conduct financial advice.  Never, never use WIFI.  But, if you must, whenever using the internet to make financial transactions, always use two-factor authentication*. 

I use checks, stamps, and USPS big blue mailboxes.  Old fashion, yes.  However, much safer.

Two-factor authentication involves using your mobile phone to receive one time passwords from the financial institution.  Without these codes, which are usually comprised of four numerical digits, the fraudster cannot carry out any transactions on your account, and even if he tried, you would be alerted to the fact that someone is in your online banking account because you would receive real-time confirmations.