Thursday, June 4, 2009

New phone phishing scam on the rise

Police, banks warn consumers not to take the bait

By Seamus McAfee

Thousands of bank customers are being targeted by a new phishing scam where they are asked to enter their credit card information over the phone, police say.

In the scam, consumers are text messaged or robocalled (where the consumer is autodialed and given a recorded message), asking them to dial a phone number and then enter their credit card info. Messages may falsely claim, for example, that a consumer's account has been compromised and an account number and PIN is needed to secure it.

Phishing refers to a crime in which the scammer pretends to be a person or company in order to extrapolate confidential information. While most phishing incidents occur via e-mail or through computers, the latest scam shows phishing can also be attempted through phone calls.

Among the most targeted for the scam are bank customers in Tennessee and the Mid-Hudson Valley area of New York, among the institutions hit are the First Federal Savings Bank, the Federal Credit Union and F&M Bank, but the scam is nationwide and being reported as far away as Hawaii.

Fred Landiss, senior vice president and director of marketing at F&M, said in an interview with the Tennessean Web site that the bank reported an increase in phishing calls since December, but the frequency has picked up significantly. "We had a great feeling we had been educating the customers and public about phishing," Landiss said. "But about two weeks ago, they started back. I think it's a problem we are going to be dealing with for some time."

The Tennessean also reported that First Federal customers started receiving the calls since mid-May, while the Fort Campbell Federal Credit Union said its customers have been targeted since early May. Both companies claim that only a few customers released their information.. "We immediately shut their cards down and reissued them a new card, said Stewart Ramsey, president and CEO at the credit union. We caught it quick enough that there was nothing happening."

Earl Bradley, First Federal CEO, told the Tennessean while his customers were safe, the latest phishing attempt only illustrates a growing problem in the current economy. "A legitimate bank will never ask for information over the telephone," Bradley said. "They are preying on the unwary, uninformed customer they catch at a hard time."

Banks advise that if customers suspects a phishing attempt, they should hang up and call their bank or the phone number on the back of the credit or debit card to verify the call. If a customer accidentally provides a credit card number to the caller, bankers are asking to call the institution immediately to cancel the account.