TL;DR – When someone calls your landline, they can prevent you from hanging up, and intercept calls you make afterwards.
There is a bug lurking on Telstra’s landline telephone system which scammers are making use of. The scam is described in The Age; it usually runs like this, where a scammer (the A-party) calls a victim (the B-party):
- This is the Rolex Store manager here. Someone has attempted to use your credit card here. Please call your bank straight away and cancel your card.
- Thanks. (hangs up) [NOT TRUE: Call is still connected because A-party has not hung up]
- (picks up receiver, hears dial tone) [NOT TRUE: Scammer is playing fake dial tone]
(Dials the number, hears the usual bank menus, and gets through to someone [Actually: the scammer’s mate].
- The scammer’s mate tells a false story of an attempt to withdraw the entire victim’s savings account and pretends to place "Red Alerts" on the account.
Some days and several calls later, the victim is told the only way to protect the money is to transfer it to a "Safety Deposit" account with Barclays in the UK until Police investigations are concluded. Several victims have complied, losing $5m in the process.
While the Fairfax media (The Age) goes into the fraud in some detail, they only make cursory mention of a "long-held" cold-call scam, and they don’t even identify it as a bug.
A Software bug
The bug is that when the B-party hangs up, the call does not disconnect. It only disconnects if the A-party hangs up, or if a timeout expires.
It is a very nasty bug, because most people believe that if they initiate their own call to the bank (or Police), the call is safe. The bug does not occur in New Zealand; the call disconnects as soon as either party hangs up. This has always been the case (30+ years) .
Like any security bug in Linux/Firefox/Windows/Oracle/etc, the question naturally arises: when can we expect a fix, and what are the precautions/workarounds?
It is Telstra’s responsibility to fix this bug.
UPDATE Part 2 – how to test your landline for the bug, and ways to protect yourself is now available