Ask the Experts: What is the Phantom Hacker Scam?
Hackers are always inventing new ways to steal people’s information and assets for their own personal gain. Recently, hackers have been using a Phantom Hacker scam, which combines impersonation with social engineering in order to access your accounts and devices.
In this blog, we’ll explain what the Phantom Hacker scam is, with tips by an expert from American Heritage on what you can look out for and how to protect yourself.
What is the Phantom Hacker Scam?
The Phantom Hacker scam uses a three stage approach, where the hacker poses as a different individual at each stage. These figures include someone from tech support, a bank official, and a government agent. Posing as these individuals, the fraudster convinces the victim they’ve been hacked, seeks access to your electronic device, and states that your money and other assets (like retirement or investment accounts) need to be moved to a “safe” account elsewhere. But in reality, it’s the fraudster who controls this “safe” account.
Common elements of the Phantom Hacker scam include:
- Urgency
- Pressure tactics
- Requests for secrecy (even amongst family members)
- Unusual payment methods (like gift cards)
- Requests to log into your device via remote access
To better understand the Phantom Hacker scam, we sat down with Jeffrey Smith, CFE, AVP of Fraud Investigations with at American Heritage Credit Union. Jeff is a crucial part of our Enterprise Risk & Compliance team, ensuring our members are protected and kept informed of the latest scams and fraud tactics.
Jeffrey Smith, CFE | AVP of Fraud Investigations
Has been with American Heritage for six years
As the AVP of Fraud Investigations, Jeff works to protect our members and credit union from scams and fraud.
Which Individuals Are Most Likely to Be Targeted by the Phantom Hacker Scam?
Anyone can fall victim to this scam, but someone who is less tech-savvy may be more at risk. Phantom hackers generally target older individuals for 2 specific reasons:
- They tend to be less tech-savvy, and may not have much experience (if any) with online banking, receiving notifications about their accounts, or how certain technologies relevant to online banking may work.
- They may have larger savings, so potentially more money to steal.
How is the Phantom Hacker Scam Different from Other Common Scams and Fraud Tactics?
Phantom Hackers are different from other scammers in that they use a multi-layered approach to fraud.
They initially contact a victim as a pop-up on their computer or other device. This pop-up could appear as a result of clicking on a suspicious link, visiting an untrustworthy website, or other means of social engineering. Remember to look out for the lock symbol in the URL bar of the websites you visit to ensure encryption, and never to click a link in an email if you don’t recognize the sender (or the email address looks off), or their email is riddled with spelling and grammatical errors.
Once the victim clicks on the alert, then the scammers go to work and use social engineering. They convince the victim that their device is hacked and get them to unwittingly download an app or software that allows the scammer to remotely access the device. The scammer will then convince the victim to pull up their bank information while the scammer monitors. The scammer will then know what account(s) the victim has, where they are located, and how much is in them.
Later, the victim is contacted by another scammer who identifies themselves as being from the financial institution where the targeted funds are located. The scammer now knows the victim’s account information (enough to include the amount of funds available, transaction history, etc.). This permits the scammer to be more convincing, so that the victim is more likely to believe the call. The scammer then tells the victim that their account(s) have been hacked and they need to put their money into another account to “keep it safe”.
If the victim does not do this in a timely fashion, or is reluctant, then another scammer may call and impersonate an “official” from the government or a higher financial area (NCUA, Federal Reserve). This scammer will again attempt to have the victim transfer their funds to another account. This account is controlled by the scammers, and once the victim sends the funds, the scammers take the money.
The scammers may convince the victim to transfer the funds via wire or ACH, purchase gift cards and provide the information to the scammer, wire the funds, or have the victim transfer the money to a crypto wallet.
What Should Someone Do if They Are the Victim of a Scam?
If you think you are being targeted by a scammer, you should hang up immediately and turn off your computer. Next, alert your bank or financial institution’s fraud department and ask to stop any pending transactions. Be sure to call the number on the back of your debit or credit card (which can also be found on your statement). This is a safer method than searching for the phone number online. Then, scan your computer with a trusted malware-detection software, change your passwords for sensitive accounts, and file a report with the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov.
How Can Someone Detect a Scam as It's Happening?
Scammers use scare tactics and urgency, as well as requests for secrecy. They may ask you to pay them in unusual payment methods like wire transfer, cryptocurrency, or gift cards, and use remote access requests over their devices. All of these should be considered red flags for a scam or fraud.
What Can People Do to Protect Themselves from Scams?
You should always verify the source of calls or emails—if you don’t recognize the person calling, hang up. Be on the lookout for signs of spoofing, where the website, phone number, or email address may appear real, but isn’t. Remember to look for the lock symbol in the URL bar of websites, and end any communication if you feel pressured or unsure. Don’t click on links, especially in suspicious-looking emails. Maintain strong security by changing passwords and using two-factor authentication. Talk to someone you trust for advice and guidance, like a family member or your financial institution.
What is American Heritage Doing to Prevent Fraud and Protect Its Members?
American Heritage provides information about scams and fraud through mailers, email, social media, blogs, online banking, home banking, recorded messages when calling into our contact center, and several other ways. We do this to educate our members on how to recognize fraud and scams. Our members are in the best position to prevent themselves from becoming the victim of a scam or fraud. If a member can identify when an attempt is being made to victimize them, then they can prevent it.
Don't Fall Victim to Scams!
Remember, American Heritage will never contact you asking for personal details or account information. If you suspect you’ve fallen victim to fraud or a scam, contact us immediately at 215.969.0777. You can learn more about protecting yourself from scams here.
