Stoltmann Law Offices, P.C has represented SIM-Swap hacking victims and continues to investigate ongoing claims related to this sordid scam impacting many people. A story reported by CNN last week went into detail about a specific victim in San Francisco. According to the story, Robert Ross had over $2 million stolen from him when his phone was hacked through a process called “SIM-Swapping” or “SIM-Jacking.” Like so many of these victims, Mr. Ross was a crypto-currency investor and those were the funds that were stolen from him. Mr. Ross is suing his cellular provider, AT&T, for its role in enabling the fraudsters who stolen millions from him. The outcome of that lawsuit is far from certain. However, Stoltmann Law Offices continues to monitor updates on these SIM-Swapping scams and are fully engaged in prosecuting cases on behalf of victims against their cellular providers.
These cases are not highly technical or difficult to grasp once you understand some of the basics. First, its important to understand one bit of technical jargon. What is a “SIM” card? A “SIM Card” is a memory chip contained inside a mobile phone which carries a unique identification number specific to the owner, stores the owner’s personal data, and disables the mobile phone if removed. SIM Swapping is a means of infiltrating someone’s cellular world by taking control of the user’s SIM Card and have it activated in a phone controlled by the scammer, without stealing the phone or breaking it open to actually remove the SIM card. Here, the infiltration is virtual and once the scammer has the customer’s SIM card activated in the phone in his possession, it can then be used to gain access to emails, brokerage accounts, bank accounts, and cryptocurrency virtual wallets.
The scheme is so incendiary because it takes advantage of two-step authentication – something we’ve all been told for years to have set up to PROTECT us from hackers. Here’s how it works: The crook convinces AT&T (or Verizon, Sprint, or T-Mobile) that he is the account owner. The crook accomplishes this typically by making up a story why the phone number needs to be transferred to a new phone. In one case the imposter simply called AT&T Customer Service, told them he dropped his phone in a lake, and that he had a new phone that needed to be activated. Instead of determining whether the phone that was allegedly at the bottom of a lake was still active and in-use, the AT&T representative accepted the unverified representations of the imposter and activated the “new” phone in the hands of the scam artist. The customer’s actual phone was deactivated and by the time it was realized, the fraudster gained access to the customer’s email and then virtual wallet. The CNN story about what happened to Mr. Ross – noticing his cell phone had no service, or “zero bars” for no apparent reason – is the first indication your SIM has been compromised.
These hackers are obviously breaking the law. Two such hackers, Eric Meiggs and Declan Harrington, were arrested and charged with multiple counts of computer fraud and other related charges on November 13, 2019. It was alleged they targeted at least ten victims and stole or attempted to steal more than $500,000 in cryptocurrency.
Mobile phone carriers like AT&T Mobility are mandated by federal law to take reasonable steps to protect customers personal information. This requirement is codified in the Federal Communications Act, 47 U.S.C. Sections 206 and 222. AT&T is regulated by the Federal Communications Commission (FCC). On April 8, 2015, AT&T was fined $25 million for failing to protect customer information in connection with a sordid scheme where its call center employees were actually selling customer information to crooks. The attacks by scam artists on customer cell phones are only becoming more prevalent as our lives become inextricably linked to our hand-held devices. AT&T has statutory and common law obligations to ensure it is taking all reasonable steps to ensure it is not allowing the unauthorized access of critical customer data to predators seeking to profit off of that information.
As is becoming more prevalent in the corporate world, AT&T customers are bound to arbitrate any disputes they have with AT&T through the American Arbitration Association (AAA). This clause is found in the terms of service contract between AT&T and its customers. The good news about this is the forum clause contained in the agreement calls for a version of the AAA Consumer Rules, which means other than a nominal filing fee, AT&T should pay the freight for the arbitrator forum fees, which can be many thousands of dollars.
If you are a victim of of a SIM-Swapping phone scam and lost cryptocurrency or other investments or money as a result, please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a no-obligation consultation with an attorney.