Scam Foiled, Internet Vulnerabilities Revealed

John Pless
August 8, 2007 - 7:17PM

Since our warning about a phone and e-mail scam last Friday we have learned that dozens of people fell for it and lost thousands of dollars.

Tennessee Valley Federal Credit Union has been able to follow the electronic trails to the crooks since we first brought you the story last week.

"We got quite a number of calls from our members, and to be honest, more non-members," according to Blake Strickland, president and CEO of TVFCU.

It was a scam that went out by phone and e-mail to thousands of people in the Chattanooga metro area. With 80,000 TVFCU members the scammers figured a one-in-ten chance of hooking a member.

An automated female voice, or an e-mail, said your account was going to expire and you should call an 800-number to give some personal financial information and restore the account.

Strickland said about 30 members fell for it and gave up their secret information.

Lynn Smith, vice president of informtaion and technology at TVFCU, said "probably within 30 minutes to an hour after you interviewed us last Friday we had that 800-number suspended or shut down."

Smith said the scam appears to have come from computers in Kansas City. It's likely that the people who own the computers in the United States never knew what was going on because hackers quietly infected those machines with a virus.

Once the "bad guys" in the U.S. collected all this information they sold it to someone else in eastern Europe. People in Hungary then made debit cards with the victim's information encoded in the magnetic strip, then went to ATM's and withdrew cash.

Banks and credit unions have very sophisticated systems that prevent hacking into their computers. So crooks prey on members and customers who are sometimes tricked into giving up financial information.

That's done by fraudulent calls and e-mails.

Scammers also know how to hide, electronically, and are always looking for a computer logged on the internet to secretly make it do their dirty work by planting a virus.

"If you're always on line, and don't have adequate protection on your computer, someone could tap into your computer," Smith said.

Smith explained that the most vulnerable to these kind of internet attacks are people who have high-speed internet service and leave their computers and modems on all the time.

Also, people who use an internet-based phone service, VOIP service like Vonage or Comcast, are vulnerable because their computers are always connected to the internet.

Smith said routers don't offer much protection, but some of the better computer protection software suites with spam protection can.

As for the scammers, Strickland said they will be hard to identify because laws in some overseas countries regarding financial and internet transactions are loose, at best.

In this digital age you should always think about protecting your computers and your personal information.