Is This Really Your Bank Calling?

Welcome to the latest edition of our newsletter for banking fraud professionals. As I have been targeted personally recently, we will be focusing on this technique that has been gaining a lot of momentum : Phone number spoofing

In an unsettling trend that's catching many off guard, phone number spoofing has emerged as a sophisticated tactic in the scammer's playbook.

Imagine receiving a call from a number you recognise, perhaps even saved in your contacts under your bank's name. The voice on the other end informs you of suspicious activity in your account, urging immediate action to safeguard your funds. Instinctively, you trust the call—after all, it's from your bank, right? Wrong. This is the hallmark of number spoofing, a fraud that is increasingly duping unsuspecting victims into surrendering sensitive information and thus potentially loosing their life's savings.

Approximately 70% of scam calls in the U.S. use number spoofing to deceive victims. This method involves masking the caller ID to make it appear that the call is coming from a trusted source

?? Understanding Number Spoofing

Number spoofing involves manipulating the Caller ID to display a different phone number from the one actually calling. Scammers use this technique to pose as representatives from banks, law enforcement, or other trusted institutions, therefor gaining the victim's trust very quickly. With the access to this technology becoming more accessible and easier to use, the frequency and sophistication of these scams have, like many other scams significantly increased in the past years.

??? How does the Scam work ?

The mechanics of number spoofing are both intriguing and concerning, demonstrating the ease with which modern technology can be manipulated for deceitful purposes. At the heart of this scam lies the principle of caller ID spoofing, which is achieved through a variety of means, including Voice over Internet Protocol (VoIP) and/or specialized spoofing software.

??? The Technology Behind Spoofing

Voice over Internet Protocol (VoIP) technology is pivotal to the execution of number spoofing. VoIP, unlike traditional telephony that relies on physical networks, uses the internet to make calls. This digital nature makes it inherently more susceptible to manipulation. Scammers exploit this by using software that allows them to mask their real number with one of their choosing. This spoofed number then appears on the victim's caller ID display, posing as a legitimate organization.

Specialized spoofing software and services are readily available on the internet, some of which are marketed under the guise of legitimate uses like privacy protection or business services. These tools enable users to input any number of their choice that they wish to appear on call recipients' caller ID displays. The software then routes the call through several networks or servers, making it appear as though it's originating from the spoofed number.

Execution of the Scam with a fake caller ID.

With the spoofed number displayed, the scam unfolds typically through a meticulously crafted social engineering tactic. The fraudster, posing as a representative from a trusted entity such as a bank or government agency, exploits the perceived authenticity provided by the caller ID to gain the victim's trust.

The conversation usually involves alarming the victim about potential fraud or security breaches related to their financial accounts, playing on fear and the human instinct to protect one's assets. To lend credibility to their claims, scammers might mention plausible yet entirely fictional recent transactions or security measures being implemented by the bank.

Convinced of the call's authenticity, victims are more susceptible to following instructions, often leading to the disclosure of personal information, transferring funds to "secure" accounts, or other actions detrimental to their financial well-being.

?? Recent Trends and Examples

The past few years have witnessed a marked rise in number spoofing. Scammers have become more inventive in their approach, often tailoring their scripts to contemporary concerns such as security breaches or pandemic-related issues during 2021. What's alarming is the diversity of their targets; no demographic is deemed safe from these fraudulent attempts, emphasizing the need for widespread awareness and vigilance. On a personal my wife has been targeted 3 times this year. Luckily they got our bank wrong the 2 first times, and did not have any reps able to talk swiss german, which never happens otherwise who knew what could have happened.

?? Signs of a Spoofed Call

So I you do not live in a region with a very specific language, recognizing a spoofed call can be challenging, but there are tell-tale signs. Any unsolicited call requesting sensitive information, especially under the pretext of urgent action, should be met with scrutiny. Be wary if the caller emphasizes the authenticity of the caller ID or if there's an unusual haste in their requests. Legitimate organizations, particularly banks, have protocols that preclude them from asking for personal information or making unsolicited calls to move funds.

??? Preventive Measures and Best Practices

Combatting number spoofing requires both awareness and proactive measures. For starters, never rely solely on caller ID for verification. If in doubt, hang up and call the organization directly using a verified number. Be cautious of sharing any personal information over the phone, particularly if you did not initiate the call.

On an organizational level, investing in call authentication technology and training staff to recognize and respond to suspicious calls can significantly reduce the risk of falling prey to these scams.

??Who is NetGuardians and how can we help banks with Spoofed Numbers ?

NetGuardians is an award-winning Swiss FinTech company that assists financial institutions in over 30 countries in combating fraud. Over 80 banks worldwide trust NetGuardians' advanced artificial intelligence solution to stop fraudulent payments and various real-time scams, such as Spoofed Caller ID scams.

If you're interested in finding out more about how NetGuardians can also benefit your organization, please don't hesitate to contact me. I'm always happy to help.

Julien Lacombe