NEW YORK—Consumers have a new privacy threat to worry about—cell phone account fraud.
Crooks are not opening up phony cell phone accounts in people’s names and using them to access bank accounts, to sign up for credit cards, or to sell the phone number for other criminals to use.
The crime is not widely known among consumers, and can have a devastating impact on a person’s finances and reputation, Consumer Reports said.
"It's a rude awakening," says Kyle Marchini, senior fraud management analyst at Javelin Strategy and Research. "Cell phone account fraud can become a huge mess that, unlike credit card fraud, doesn't have infrastructure in place to resolve."
Unlike other types of fraud, with cell phone account fraud there are fewer consumer protections. It’s also harder to detect, so it can go unnoticed for months. By then, bank accounts may be drained, credit card companies may be after consumers for unpaid bills, and the police may be investigating cell phone users for crimes committed in their name, according to authorities.
“Sometimes you may not find out about it until the account goes into arrears, and it can take months or years to fix that, not to mention the monetary expense usually entailed,” said KrebsOnSecurity’s Brian Krebs, in the report. “The hassle of trying to recover from this kind of ID theft is a lot worse than the few steps that people need to take to prevent it.”
The biggest step consumers can take is putting a freeze on the credit information that is used to open a cell phone account, Consumer Reports said.