Fraudsters scammed AT&T and T-Mobile out of $22 million in phones

Everywhere we turn, we’re reminded of just how vulnerable our personal information is to being pilfered by scam artists. Combined with the telecom industry’s woefully inadequate security policies, you’ve got a recipe for a perfect storm of fraudulent activity. In fact, a couple of scammers from Brooklyn, NY managed to defraud wireless giants AT&T and T-Mobile out of some $22 million worth of mobile phones under assumed identities. Or, maybe it’s more like AT&T and T-Mobile let themselves get scammed out of millions.

Using their insider knowledge of wireless carriers’ information systems, the two men were able to get their hands on customer information. Then, using their knowledge of carriers’ ordering systems, the men used their illegally-obtained customer information to order boatloads (that’s a technical term) of handsets – $22 million worth, to be exact.

The two men, according to the Wall Street Journal, were indicted yesterday. The criminal duo have been charged with conspiracy, mail fraud, wire fraud and aggravated identity theft for their multi-million dollar scam. If convicted, and we don’t see how they wouldn’t be, they stand to serve up to 20 years of prison time just for the conspiracy charge.

While it’s good that scammers like this are put in their place, the story raises a more pressing issue. The telecom industry is frighteningly ill-equipped to prevent fraud. Just the other day I came across a story of a chubby blind kid that was sent to jail for over a decade for impersonating telecom employees and hijacking telephone systems. He created havoc for years from the comfort of his bedroom. Huge wireless carriers like AT&T have a responsibility to their customers to protect sensitive information. At the very least, they better not try to increase prices to make up for getting scammed out of millions of dollars in cellphones.

[Via: BGR]