Consumer Reports has an excellent article on how a new form of identity theft – cell phone fraud – is growing rapidly. The number of fraud victims increased 63% from 2016 to 2017 alone. All signs suggest that the number will continue to increase in the near future.

What is cell phone fraud and how does it work?

Criminals use personal information which obtained in a data breach or bought on the dark web – including names, dates of birth, email addresses, Social Security numbers and bank and credit card numbers – to apply for a cell phone account in the name of the consumer whose identity was stolen. In some cases, they transfer the victims’ cell phone number (called “porting”) to a new, fake account. A thief who opens a fake account has total control of that account and can use it to access the victim’s bank and financial accounts.

Why is cell phone fraud a problem ?

Cell phone fraud can be a bigger problem than other types of identity theft because it’s harder to prevent and detect. In general, it’s easier for criminals to open fake cell phone accounts than fraudulent credit card accounts.  Banks run credit checks with the major nationwide consumer reporting agencies (Equifax, Experian and TransUnion) when a consumer applies for a new credit card. If the consumer has placed a credit freeze with the three CRAs, the bank won’t issue a new credit card until the consumer lifts the freeze. Credit freezes are very effective in preventing identity thieves from opening new credit card accounts or taking out loans in the names of people who have had their personal information stolen (which is pretty much all of us).

But when a thief applies for a cell phone account in a victim’s name, the cell phone carrier may not run a credit check. Or if it does, it may run a check through a specialized consumer reporting agency instead of one of the nationwide CRAs. Unless the consumer has also placed a freeze with the specialized agency – and few of us do – the carrier will open a new account for the thief if the victim has reasonably good credit.

Consumers who have been victimized by cell phone fraud won’t likely know about it right away. Some won’t know until they’re contacted by the police. Others will find out only when the fake account goes into default and they’re contacted by the carrier or a debt collector. Those victims whose cell phone numbers were ported to the fake account will stop receiving texts and calls or have their service interrupted. But the thieves may have emptied their bank accounts or run up charges on their credit cards by that time.

What can you do to protect yourself from cell phone fraud?

If your personal information has been stolen in a data breach, you should place a credit freeze with each of the three nationwide CRAs if you haven’t already done so. Unfortunately, that probably won’t stop cell phone fraud. To protect yourself, you should also place a credit freeze with the National Consumer Telecommunications and Utilities Exchange (NCTUE) , the credit reporting agency that many cell phone carriers, cable television and internet providers and utility companies use when consumers apply for new accounts.

You should also see if you can get a PIN from your cell phone company. A PIN will prevent a thief from porting your cell phone number to a new account.

Keep a close eye on your bank and credit credit card statements. Check them frequently and carefully for fraudulent withdrawals and charges.

Lastly, if you suddenly stop receiving calls or text messages, contact your cell phone company immediately. It could mean that a hacker or identity thief ported your number to a fake account with a different carrier.

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