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article imageHas your financial institution's caller ID been 'spoofed'?

By Andrew Moran     Jan 25, 2013 in Technology
Lake Oswego - Is the practice of caller ID spoofing a crime? That is the debate that is going on in several countries around the world. This causes the telephone provider to display a number on the person’s caller ID that is not actually from the originating number.
Most consider spoofing as malicious or fraudulent intent. Akin to email spoofing, when it appears that an email came from a specific person, the participants use certain software programs or technology, such as VoIP or PRI lines.
A telemarketer could spoof the number of your primary bank and pretend that they’re calling on behalf of the financial institution. With a lot of people unaware of this practice, unsuspecting customers could easily become victims and provide all of their personal information to the individual or entity calling.
With more than 60 billion telephone calls to verify a person’s identity, it is easy to surmise that spoofing is a growing industry for criminals – a $50 billion problem – especially when there aren’t too many laws in place or even being enforced around the world. Private officials have already sounded the alarm in Canada.
The issue has become so serious that Congress decided to take action in 2006. New York Democratic Congressman Eliot Engel and Texas Republican Congressman Joe Barton introduced legislation that would label this type of action as a crime. Later, a similar bill was introduced in the Senate. It wasn’t until 2010 that “Truth in Caller ID Act (TCIA)” was passed in both chambers and President Barack Obama signed it into law.
However, some states have not enforced the federal law and have actually ruled against it. Last month, United States Court of Appeals for the Fifth Circuit in Atlanta concluded that spoofing was allowed as long as it was not harmful, like mystery shopping.
“In the light of [TCIA]’s carefully drafted language and legislative history, and in spite of the presumption against preemption that attaches to a State’s exercise of its police power, there is an inherent federal objective in TCIA to protect non-harmful spoofing,” the Fifth Circuit stated. “ASA’s proscription of non-harmful spoofing—spoofing done without ‘intent to defraud, cause harm, or wrongfully obtain anything of value’—frustrates this federal objective and is, therefore, conflict-preempted.”
Security has come into question, which is why telephone transaction platforms to validate identities have become initiated, including one created by, a company that “serves customers, not criminals.”
Founded in 2007, the Portland, Oregon-based TrustID aids financial institutions and companies that specialize in telephone-based commerce know who they’re actually speaking with. In the end, it automates their telephone authentication process.
The accelerated firewall procedure includes having callers pre-answer, validates identification with physical information, reduces something called “interrogation time” and improves the customer experience. This also helps companies lower call center costs by as much as 20 percent.
“We do it in a unique, technological way that doesn’t require interrogations,” said TrustID founder Patrick Cox in an interview with the Portland Business Journal in 2010. “I say that to be provocative — the notion that when you call a bank they ask you 20 questions – we can really short-circuit a lot of that.”
It appears that TrustID has gained the admiration and respect from investors as it has raised $4 million in private investments. The revenues have not been posted, but the company’s future depends on execution.
Indeed, phone phreaking (phone hacking) is still rather common, even if much of the security breaches reported on relate to computers and the Internet. Just head on over to the TrustID’s newsroom section of its website and you will certainly notice the countless news articles that highlight the problem.
“You don’t know who is on the other end of the line, no matter what your caller ID might say,” said Sandy Chalmers, a division manager at the Department of Agriculture, Trade and Consumer Protection in Wisconsin, in an interview with the New York Times. “Do not trust your caller ID. And if you pick up the phone and someone asks for your personal information, hang up.”
More about caller id spoofing, Financial institutions, Telephone, trustID, personal identification number
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