Hackers Now Stealing Your Cell Number & Money

How to prevent this new form of theft from happening to you

I. Setting the Stage

I’m going to tell you a story about how a new wave of bad actors are stealing your phone number. They then use that to gain access to your social and bank accounts. It happened to me. Twice. It’s happened to some friends. It’s even happened to a major Venture Capitalist. But first, it’s important to understand the exploit they’re using and how you may be vulnerable.

The new identity theft isn’t what your parents or most people talk about. People walking by you trying to scan the magnetic strip from your credit card isn’t the big problem. Nor is swiping your card through an unauthorized machine.

No, the big problem, now that we live in a technological age that is accelerating, and with the continued adoption of cryptocurrencies like Bitcoin and Ethereum is more subtle and often more scary.

II. The Vulnerability

The hourly-paid customer support people at your cell phone provider is your biggest threat. Hackers call in, pretend to be you, and have this customer service rep change your digital SIM card number. They keep calling until they get someone who bypasses any security protocols or notes on your account. Including, get this, “DO NOT PORT SIM CARD UNLESS ID IS PRESENTED IN PERSON”.

You can now get the last 4 digits of someone’s social security number fairly easily from a variety of sources, which I’m not going to name publicly here. Using that, the cell provider doesn’t honor the passcode on your account. Because the hacker just gives the last 4 of your social.

Once your cell phone provider switches the digital SIM card number and points it to the hacker’s phone, two things happen immediately:

1. You no longer have cellular service. Most people only have a cell phone these days, and no land line. Which means you can’t call anyone for help. Including your cell provider. Scary, eh?
2. Your Gmail password and security codes are reset. The hacker uses that fancy 2-factor authentication to send a code to your cell phone number. But now that the SIM points to their phone instead of yours, they get the passcode, not you. So all that stuff you hear about 2-factor being secure, simply isn’t.
3. They steal your money. They use the above two methods to gain access to Coinbase, then transfer whatever money you have in Bitcoin or Ethereum into Litecoin, then send that to their own account. In short, they’re using cryptocurrency to not just steal, but also launder, money. They also attempt to gain access to your bank account by transferring more money into Coinbase.

T-Mobile failed me twice with the above. Gmail failed me twice. Coinbase failed me once (because I never put more money into it). Chase bank saved me.

Note: the FDIC does NOT protect against individualized theft. Only a mass attack on an entire site like Coinbase. So don’t trust the Federal Government to come to your rescue, either.

It’s a big problem that I fear is going to get bigger, and we require something like an insurance policy Direct to Consumers to help peace of mind against these sorts of attacks. If you’re passionate about this problem, please give me a shout.

III. How To Protect Yourself

There are a few simple things you can do right this minute to protect yourself:

1. Call up your cell phone provider and have them increase any and all security protocols on your account to not let them port your SIM card to a different phone without an in-store visit showing ID. Change your numeric passcode on your account. And ask them to not accept the last 4 digits of your social security number.
2. If that doesn’t work, change cell phone providers. None of them talk in their marketing materials about cybersecurity or theft prevention. They only talk about removing contracts and the biggest network. All that means is they’re more vulnerable.
3. You have the power. You are a paying customer. If you don’t like the way a service provider is treating you, you have the ultimate ability to walk away and give someone else your money who treats you better.

I hope this helps you and your family from falling into the same trap that I’ve now heard countless others in the tech community have been affected by.

We’re also working on a story with Fortune about this. More to come on that front.

— Sean Everett

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