‘A nightmare’: SIM card swap scam hits Toronto-area couple for more than $140,000

Wayne Stork and his wife Diana had not heard of the SIM swap scam until they became victims.

The Greater Toronto Area couple did nothing wrong but they lost about $140,000 anyway.

“It’s a nightmare,” Wayne told Global News in a television interview, his wife Diana at his side.

“We’re doing this, in part, to get the word out,” Diana said.

The Storks are longtime customers of Freedom Mobile. Last September, when the couple were at home, Wayne’s phone suddenly stopped working.

“My phone went into SOS mode, it was deactivated,” he said.

From that point, Wayne had no use of the phone, but someone else had access to the personal information attached to it.

“He (Wayne) was watching his accounts drain of money, that’s when the panic set in,” Diana said.

Over the next 24 hours, scammers had gained access to Wayne’s stock trading account and other accounts, including a cryptocurrency one that contained the proceeds from an inheritance.

“The Bitcoin was worth $140,000, and we lost that,” Diana said.

When the couple called Freedom Mobile’s customer service line, they say a representative said records showed someone had obtained a new SIM card in a retail location in Toronto, apparently claiming to be Stork.

Stork says the phone representative asked “weren’t you in the store yesterday to get a new SIM card?” to which Stork said no, it wasn’t him.

A SIM swap scam can take different forms. They are variations of takeover frauds in which criminals contact your mobile phone provider and trick them into activating a SIM card, giving them access to your phone number.

By the time Freedom Mobile took action, Stork’s losses through Wealthsimple were substantial: they included $5,500 from a stock account with CIBC; a TFSA account valued at $15,100; and shares in Canadian Western Bank valued at $6,013.

Stork says after reporting the fraud to police and to the Wealthsimple platform, the company acknowledged he was not at fault. Subsequently, Wealthsimple returned the money that had been taken by the fraudsters.

But a separate account with Coinbase, unrelated to his business with Wealthsimple, in which he says he had roughly $140,000 in Bitcoin, that money is gone for good.

“That’s our retirement, that’s our money,” Wayne said, frustrated with Freedom Mobile that in six months since his account was compromised, he says the wireless carrier has not provided compensation.

In an email statement to Global News, Freedom Mobile wrote: “The security of our customers’ information is and will always be a priority to us. SIM swaps are an industry-wide issue, and Freedom Mobile is actively working to prevent them from happening.”

A company spokesperson added that in Stork’s case: “we can confirm that we have been in contact with the customer to resolve the issue.”

The Canadian Telecommunications Association, which represents many telecom providers, told Global News “Our members take any issue related to their customers’ privacy and security very seriously”, wrote Nick Kyonka, director of marketing and communications, in an email statement.

Between October 2020 and May 2021, a time during which providers implemented new security measures, “there was a 95 per cent decline in the total number of unauthorized number transfers and SIM swaps,” Kyonka stated.

The Canadian Radio-television and Telecommunications Commission, or CRTC, which regulates the industry, wrote that it “recognizes this is an issue.”

“The CRTC empathizes with this stress and hardship that this type of fraud places on individuals,” a spokesperson said after a request for comment.

But John Lawford, executive director of the Ottawa-based Public Interest Advocacy Centre, said in an interview Canada needs to make regulatory changes to protect consumers from SIM swap fraud.

“To make this the phone company’s problem and not the customer’s problem,” Lawford told Global News.

“There’s no penalty in the regulatory system,” he said, as compared to other countries where phone companies are held accountable if customers are defrauded.

“In Australia it’s the equivalent of (a penalty of) $200,000 per incident of SIM swapping,” he said.

Lawford added that while the industry told the CRTC that the number of cases of fraud is greatly reduced phone companies won’t disclose how many customers were defrauded in the last year.

Wayne and Diana Stork are paying a high financial price for something over which they had no control. Legal action against Freedom Mobile is one possibility that’s been considered.

What can consumers do to reduce the risk they’ll fall victim to SIM swapping?

The Canadian Telecommunications Association recommends that people do not publish personal information such as their birth dates on social media; it warns to watch out for email and text message prompts asking to change passwords or to update account information; and it advises consumers to make sure that security questions and answers for account verification with a service provider are difficult to guess.