I first learned about this scam from Providence’s NBC 10 News consumer reporter, Emily Volz. It involves scammers getting access to the cellphone insurance of their victims and putting in claims whereby the scammers receive new cellphones which the scammers then sell on the black market. Usually the victims do not find out about the misuse of their insurance until they put in a legitimate claim.
Many people purchase cellphone insurance with a premium around $12 per month. This insurance will cover repairs and replacement cellphones when the cellphone owner encounters a problem with his or her cellphone. Unfortunately, this insurance can be exploited by identity thieves who steal information about the insurance. Armed with the victim’s Social Security which they have also stolen, they then put in a claim for a replacement phone which they have sent to addresses controlled by the scammer.
Recently six people in California were sentenced on charges of operating this type of scam on a large scale in which they filed 1,300 claims and received cellphones and insurance benefits totaling approximately $636,000. In that particular case, the information necessary to operate the scam was obtained by three of the scammers who were Verizon employees who, through their job, gained access to their victims’ account information which they then used to commit the fraud.
There is little that you can do to protect yourself from the misuse of your personal information by rogue employees of companies that have your personal information. However, other instances of this type of fraud occur when victims’ information, including, most importantly the victims’ Social Security numbers is stolen. Protecting the privacy of your Social Security number is one of the most important things you can do to help protect yourself from becoming a victim of identity theft. As much as you can, limit the places that you provide your Social Security number and never carry your Social Security card in your wallet.