The TBC Podcast Episode 3: Phone Cons

A look at the true relationship between call centers in India and the IRS, and your personal information.

Here’s a look at a piece we ran last year (pardon the oudated name) about a common phone scam that we all need to be aware of.

Special Thanks to Robert Siciliano, for his contribution to this week’s episode!

Robert Siciliano is a personal security expert, a best-selling author, and a Certified Identity Theft Risk Management Specialist. He is also a contributor to our blog.

[Transcript]

JG: This is the TBC Podcast, by BestCompany.com. I’m Jordan Grimmer. On this week’s program, we’ll tell you the story of Sahil Patel, a man who moved from India to the United States with the hopes of striking it rich. We’ll also tell you how he realized his dream, and how that dream eventually landed him behind bars. But first, if you want to catch any of our previous episodes on student debt or personal finance, you can find the links to those on the text version of this podcast. You can also like us on Facebook or follow us on Twitter for the latest additions to our blog, as well as updates on the best companies in a given industry. These companies have been evaluated by experts and rated by actual customers. And now, let’s start the show.

Episode Three: Phone Cons. Before we can tell you the story of Sahil Patel, we need to tell you about Rachel, whose last name we’re leaving out for security reasons. Rachel is a wife, a mom, and pays her taxes like any responsible citizen would. Then one day, Rachel received a phone call. The caller ID said the call was coming from somewhere in California, and although Rachel and her family had once lived in California, she didn’t recognize the number, so she let it go through to voicemail. When the message had recorded, this is what she heard:

AW: This message is intended for Rachel. Rachel, this is Alex White with the Department of Legal Affairs, and I was trying to reach you in regards to a very important issue. This is a verbal notification for you in regards to the law enforcement actions that have been started on your name.

JG: He states his telephone number.

AW: If for any reason you are too busy to call back, I would suggest that you do have your retained attorney do it for you, as delaying calling us might end up into a legal mess for you. I hope you take this right and call me back. This is Alex White with the Department of Legal Affairs, looking forward to speak to you. Until then, you have a blessed day and goodbye.

JG: For those of you who had a hard time understanding what was being said, allow me to repeat it: “This message is intended for Rachel. Rachel, this is Alex White with the Department of Legal Affairs, and I was trying to reach you in regards to a very important issue. This is a verbal notification for you in regards to the law enforcement actions that have been started on your name. If for any reason you are too busy to call back, I would suggest that you do have your retained attorney do it for you, as delaying calling us might end up into a legal mess for you. I hope you take this right and call me back. This is Alex White with the Department of Legal Affairs, looking forward to speak to you. Until then, you have a blessed day and goodbye.”

This message, to say the least, is unusual; a little ridiculous, to be sure, but also a little unsettling. Someone, claiming to be a government official, calls your home number, addresses you by your full name, and tells you that you might have a legal matter on your hands if you do not call back. Then, he tells you to have a blessed day, and hangs up. How would you feel? What would you do if you received a call like this? What if you had unpaid taxes, a criminal record, or were maybe in the country illegally? What if you were simply curious or suddenly afraid that you had broken the law? Well, if you’re like the over 3,000 Americans who fell victim to this particular scam, you’re scared enough to not only call back, but also hand over some cash just to prevent that “legal mess” from taking place. This year, Americans were duped out of approximately $15.5 million by people like this “Alex White” who are assuming the identities of government agents, bringing us to the story of Sahil Patel. Back in July, Patel who had recently moved from India to the United States, was sentenced to 14 and a half years in prison by a U.S. District Judge for his role in a massive phone scam that targeted the financially vulnerable. Charged with both conspiracy to commit wire fraud and impersonating a government official, Patel and his organization stole over $1 million from unsuspecting Americas. And this wasn’t an isolated crime. Last month, September of 2015, Akash Patel (no relation) and an accomplice were arrested for a similar crime, fooling at least 70 people across 32 states. The two were seized with over $150,000 in ill-gotten gains in their possession. And this left us wondering, why is this so easy? How are people like Sahil and Akash Patel able to profit so much off of this scheme? How can we better protect ourselves?

For answer to these questions and more, we turned to Robert Siciliano, a professional security analyst, author, and all-around worst nightmare to crooks both foreign and domestic. In addition to specializing in identity theft prevention, Robert is also qualified to speak on personal security and self-defense, scams and hacks, home invasion prevention, and social media security. He is also a contributor to our blog at BestIDTheftCompanys.com. We got Robert on the phone, and first asked him for his expert opinion on how these phone call schemes are so easily executed:

RS: Certainly, pulling off a scheme like this is easy enough for an individual to accomplish. The script is out there. The technology is out there for the robocalls. The language “they receive payment” is readily accessible. This particular scheme — scam — is a matter of checking the dots, and it’s being done every day by individuals everywhere. But scams like this are much more effective when it involves organized crime. So you have a number of people within an organized crime syndicate, and that number of people can be anywhere from two to 20 people that all have their role and responsibility in that scam. And everybody pulls their weight and does their job as effectively as they do. It’s like any for-profit organization that has employees in different departments that perform various functions. Organized crime is no different. And when it’s conducted in that manner, they’re able to execute potentially hundreds or thousands of scams a day. And it becomes a numbers game for them. The more phone calls they can make, the more people will pick up the phone, the more effective the scam is.

JG: Even so, people get robocalls all the time, usually from telemarketers. What is it about these calls in particular that makes them so effective?

RS: Scammers are known for their coercion-type tactics. It’s what they do: they instill fear, uncertainty, and doubt in their victims — hoping to catch them off-guard — and ultimately persuading them to give up personal information, usernames and passwords, credit card data, and even forking over money in various forms. When people get calls like this, they’re caught off-guard; they don’t expect to be threatened in any way, shape, or form over the phone. And the anonymity of the call, the faceless voice, makes it that much more intimidating. And once it occurs, people get a negative gut-reaction, they feel fear, and often it works, structurally, with people that are elderly, and of course the naive.

JG: But what about making the phone call appear to come from a domestic number? How are they able to manage that?

RS: What often makes a scam that much more legit is caller ID spoofing. So they spoof caller ID meaning that what shows up on caller ID is supposed to be legit, right? But not necessarily. There are services out there that one could initiate online for pennies per call that allow whatever the scammer wants to show up on caller ID show up. So, you could pay to have caller ID say “Publisher’s Clearing House” or the name of the local police department, along with the local police department’s phone number, and that’s what will show up on caller ID.

JG: With these statements in mind, we then played the message from Alex White for Robert, and asked him to break it down for us, beginning with the first sentence:

AW: This message is intended for Rachel.

JG: The first question that comes to mind is, “how on earth did this guy know Rachel’s name and personal phone number?”

RS: So they can get your information in a number of different ways. They may not initially have your name. So the easiest scam to pull off is one that initiates robocalling technology. So that’s either a fee that you pay to boot up a server that has robocalling technology that you can tap into. Or that same technology will call a local area code. So if you have an area code and extension they just go through the list, one-by-one. If you’re in the Boston area, the local area code is 617. And then they’ll go 617, and then the extension might be 257. So 617–257–1111, then 1112, then 1113, then 1114, then 1115, and so on. And they’ll just keep calling and calling and calling until they exhaust the extension. It’s simple as that. And as far as knowing names and such, there might be a specific list that they might pull from. It could be the phone book, it might be the Whitepages, they could buy a list. There’s unlimited lists out there with names, addresses, and phone numbers that one could propagate into a document that would be be fed into a local calling database and ultimately — once they drop somebody’s name in that call as a form of social engineering, they sound so much more legit because they know your name, and it strikes that much more fear into your heart if you’re a victim.

JG: And he’s right. After making the arrest on Sahil Patel, investigators discovered that he had obtained lead sheets that included the names of people who were financially vulnerable. Whether you like it or not, a lot of your information is public record. And any time you sign up for a contest, or apply for a mortgage, or entered any type of drawing, your information is collected and archived, and on some occasions, sold to the highest bidder. So, with this in mind, we then asked Robert about the individual on the other end of the phone call:

AW: Rachel, this is Alex White.

JG: Now, forgive me if this sounds like racial profiling, but I’m almost certain that “Alex White” is not this man’s real name. And in case you couldn’t tell from the background noise, this call may very well be coming from a call center likely from somewhere in India. This would be similar to one of those call centers you’ve probably called once or twice for tech support. In fact, I was redirected to one such call center a few weeks ago when my cable went out. Call centers like these are often used by large businesses as a cheap way to provide round-the-clock phone support to their customers. According to Forbes, there are over 265,000 call center jobs in Bangalore — one of India’s capital cities — alone. And for the most part, call center jobs are fairly coveted and well-paying positions. Unfortunately for India, similar call centers in the Philippines are quickly outpacing their Indian counterparts in annual revenue and success rates. The Los Angeles Times reported that call centers in the Philippines will generate roughly $25 billion in revenue by 2016. This comes amidst further reports that companies like British Telecom (whose 2014 revenue was over $28 billion last year) are shutting down their India-based call centers due to poor service.

In an industry that’s in decline, more and more people are just happy to still be making money. And while we can’t speak for the potentially thousands of call center employees who have made calls like this, you can imagine there are some who simply don’t care about the reason they’re getting paid. So when we asked Robert Siciliano about the ethical dilemma that these call center employees might face when tasked with sending threatening messages to unsuspecting victims, he said for many, there is none:

RS: An entire call center that might be employing their help for pennies to dollars, a few dollars an hour — which essentially is labor that in the end isn’t sufficient — they have no qualms about scamming or fraud. It’s no skin off their back. They’re a for-profit agency that’s employing people for pennies and they just don’t care.

JG: So, while Alex White may not necessarily be complicit in the scheme, he’s got to make a living just like the rest of us. And and as long as they’re paying him, he’ll read whatever they tell him to read, and work ridiculous hours (remember, they’re on the other side of the world, so they’re often making these calls in the middle of the night for hours on end. Many of these call center employees have gone months without seeing their families). It’s a sad reality to consider because it doubles the amount of people these crooks are exploiting on a daily basis. So now that we know basically who Alex White really is, and where he’s coming from, we asked Robert about the government organization Alex White claims to represent:

AW: The Department of Legal Affairs.

JG: And this is what he had to say:

RS: Once they start throwing “the IRS,” or “The Department of Legal Affairs,” or any other government entity or agency, it’s just total BS. There is no “Department of Legal Affairs” for one, and the IRS is not gonna call you. They just don’t do that. And when consumers realize that the IRS or whatever department — they are not going to call you — ever. It’s not gonna happen. They’re not that important. If anything, they’re gonna send you a letter in the mail — registered for that matter — but they’re not gonna call you.

JG: And that’s the bottom line here. The IRS reported about $114 billion in unpaid taxes last year. Do you really think they’re going to take the time to individually call each person on that list? No. And if the call really was coming from the government, would you really expect them to tell you . . .

AW: have a blessed day

JG: No. And in response to this widespread scheme, the FTC has released a statement specifically stating that the IRS will never call you. So has the U.S. Department of the Treasury. But you know what? This is just one type of scam; it’s only one in a complex network of phone scams that are going on right under our noses every day. In fact, Robert Siciliano identified a handful of other such scams just off the top of his head:

RS: There’s the grandparent scam: someone calls you posing as your grandson, and they might get your information from Facebook, or they say, “hey, grandma,” with a bad connection, and the grandmother’s like, “who’s this? Is this Johnny?” “Yeah, it’s Johnny!” So, bang! He’s got grandma right there. And then of course there’s the IRS scam: you owe back taxes. There’s a remote assistance scam: someone calls you posing as Microsoft that your PC needs updating, and they’ll charge you $250 to update your PC, along with downloading malware — they charge you to download malware! It’s pretty insane. And the list goes on and on and on. There’s timeshare scams — I bought a timeshare years and years and years ago — and I would say my phone rings every day, three or four times a day for timeshare scams.

JG: To name a few. And the scary part is that these scams aren’t just originating from individual con artists or criminal organizations; some are coming from quote-unquote “legitimate” businesses. Just last month, the FTC sued Lifewatch Inc., a company that makes and sells medical alert systems for the elderly, for using the same robocall technology and tactics employed by criminals — criminals — to trick seniors into purchasing expensive medical alert systems — threatening them that if they didn’t act fast this offer would expire and they would be left unprotected (you can find the link to the piece I wrote about it in the text version of this podcast). Phone cons are everywhere. And as soon as law enforcement shuts one down, it seems like two others spring up. So, what do you do about it? Do you just never pick up your phone for anyone? Do you just cancel your phone subscription altogether? You might try Robert’s “5-Second Rule” when your next suspicious call comes in:

RS: If I don’t get legitimacy in the first five seconds of the call, I’m hanging up. If they cannot articulately describe what it is that they are looking for or what it is that they’re after in a manner in which it is proof-point that they’re legitimate, I’m hanging up on them. They have five seconds to prove their worth to me. And that’s that.

JG: Then again, perhaps you don’t need to let things get to that point. When we asked Robert for the number one thing that people could do to protect themselves from predatory calls like this, his answer surprised us. He didn’t advertise a product, or try to plug his latest book. His answer was simple:

RS: Having a clue is the first thing. And then to those in your life who maybe don’t have a clue, you wanna forward this podcast to them, so that they’re aware as well. Awareness obviously is key. Keep in mind again when the phone rings, when an email comes in, there’s a con going on. We call it a confidence crime, and the whole point of a confidence crime is to gain your confidence and then you’ll cough of data or cash. And often, these cons are very convincing due to the fact that they’re orchestrated by people that have a certain talent for social engineering and conning, along with maybe they’ve even taken some college courses on persuasion. So again, when you receive this type of communication, the best thing to do is to hang up. Despite what they might say, that you may stand to lose something — you might be fined or arrested or whatever the case is — or you stand to gain something — you might win the lottery or Publisher’s Clearing House or whatever the case is — you’re not gonna lose anything, you’re not gonna gain anything. It’s a scam. The second the phone rings it’s a scam.

JG: And that’s a good place to conclude. Like I’ve said from the start, the purpose of the TBC Podcast is to help consumers make smarter decisions with their money — and that includes protecting consumers from fraudulent phone cons like the ones discussed today. Look, I can recommend dozens of identity theft companies to help you secure your personal information until the cows come home. I’ll be honest, that’s part of what I’m paid to do here at BestCompany.com. But none of that will mean a thing if consumers aren’t learning to protect themselves first. $15.5 million doesn’t speak as much to the cleverness of the con artist as it does to the ignorance of the conned. Remember, you always have a choice when it comes to situations like this. Don’t let yourself get pressured into giving up information that you don’t feel comfortable divulging. Always check the source, and match it against what you know to be true. Again, this is the TBC Podcast. I’m Jordan Grimmer, and we’ll see you next week. Until then,

AW: Have a blessed day and goodbye.

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