SIM-Swap Scams are a Major Problem, Warns FBI, But Victims Have Legal Recourse.

Chicago-based Stoltmann Law Offices represents victims of SIM-Swap fraud nationwide on a contingency fee basis. Typically, SIM-Swaps end-run is designed to pillage a victims’ financial accounts.  Although SIM Swaps put many types of accounts at risk, the vast majority of SIM Swap scams lead to the unauthorized access by a fraudster to the victim’s crypto-currency accounts held with companies like Coinbase and Voyager.

These scams have different varieties, but they boil down to the same theme.  Some how, but usually by social engineering or pretexting, an impersonator contacts your cellular telephone carrier, like T-Mobile, AT&T, or Verizon, and either 1) requests that the SIM card – The special identification key linked to your phone number that is unique to you and is what allows your phone to communicate with the cellular network – be transferred, ported, or “swapped” to a new device or phone; or 2) that it be ported over to a new carrier (like T-mobile to AT&T). In either scenario, the carrier then fails to properly identify the fraudster as an impersonator for myriad reasons, and transfers the SIM to a phone that is in the possession of a crook.  The crook, who already has built a file on the victim, goes to Coinbase, for example, and requests to change a password. When that information is confirmed by Coinbase, and because the real user has taken steps to protect their account, Coinbase fires off a message to the cell phone number on file, containing an authorization code, which the criminal now gets, not the real account owner. Armed with the authorization code, the crook changes the password, walks into the Coinbase or Voyager account right through the front door, typically converts whatever crypto-currency is in the account to either Bitcoin or Ethereum, and then transfers it out of the account to an anonymous wallet in the possession of the crook.  Your crypto is gone.  You will spend days emailing Coinbase or Voyager, desperate to speak to an actual human who you think can help you. But they will not. They will tell you they are sorry, but that there is nothing they can do about it. If this seems like a bad dream or some horror story reserved for a camp-fire, it is not. This is a real scam that happens countless times, every day, all over the country.

Just today, a story was posted by the Honolulu Star-Advertiser about the FBI warning of “growing SIM-Swapping threat.” The FBI stated that the FBI Internet Crime Complaint Center received 1,611 SIM Swap complaints in 2021, compared to a total of 320 from January 2018 through the end of 2020. This massive increase, according to the FBI, cost victims at least $68 million. Importantly, these are only those complaints reported to the FBI ICCC.  The real numbers are likely much higher than what is being reported by the FBI.  The FBI advised cellular carriers to do better: to educate their employees through training, set strict security protocols which require employees to verify customer credentials before changing a number to a new device, and to authenticate calls from third party retailers asking for customer information.

Stoltmann Law Offices has represented dozens of SIM-Swap victims in arbitration actions before the AAA.  Our attorneys are experienced in representing victims of fraud and now the AAA arbitration forum very well having practiced in various arbitration forums for decades.  We represent our clients on a contingency fee basis which means we do not get paid until you do!