Credit card scammers are constantly coming up with new ways to scam cardholders or putting a new spin on an old credit card scam. Being on the lookout for scams protects your credit card information and helps you prevent fraud and unauthorized charges on your credit card account. Here are a few credit card scams to watch out for.
The credit card industry is moving to EMV chip enabled credit cards to reduce credit card fraud. The move has taken place over several months, with credit card issuers sending out new cards over a period of time rather than all at once.
How the Scam Works
Scammers, posed as credit card issuers, email consumers warning that the cardholder must update their personal information before they can receive their new chip card. Replying to the email with personal information, even clicking a link and entering personal information can give the scammer information that can be used to commit identity theft.
How to Avoid Being Scammed
Credit card interest rate reduction scams take advantage of frustrated credit card users who want to cut their credit card rates and pay off their balances faster.
How the Scam Works
You receive a pre-recorded call from someone who says you qualify for a program that will help you lower your interest rate and pay off your credit card balance sooner. All you have to do is pay a fee, enroll in a program, and the company will work to lower your credit card interest rate.
The call may sound like it comes from your credit card issuer and the company may even have your credit card account information. The scammer charges your credit card for the services, but doesn’t help you lower your interest rate as promised. You might be charged even if you decline the services.
How to Avoid Being Scammed
Having your credit card issuer warn you about fraud on your account can protect you from future fraudulent charges. Ironically, scammers can use this type of phone call to commit real fraud.
How the Scam Works
You receive a call from someone who says they’re from your credit card issuer’s fraud department. They say there has been suspicious activity on your account and need some information from you to verify whether your account has been compromised.
Scammers may already have some information – your name, address, or account number – and they use this to subtly convince you that they’re your credit card issuer. They’re calling to get additional information they can use for fraud – the security code on the back of your credit card, for example.
How to Avoid Being Scammed
A hotel is probably one of the last places you’d expect to be defrauded, but you have to be on guard even when you’re on vacation.
How the Scam Works
You’re relaxing on vacation or settling in for a business trip and in the middle of the night, you receive a call to your hotel phone from someone claiming to be from the front desk. The caller says there’s been an issue with the hotel’s computer systems and they need to you to give your credit card information again. If you give up your credit card details, the scammer can use the information to make fraudulent charges on your account.
How to Avoid Being Scammed
In an effort to save data on your phone or to avoid paying for Wi-Fi when you’re in public, you may look for and connect to the first open Wi-Fi hotspot you find. But this may not be a safe choice.
How the Scam Works
Scammers set up a free Wi-Fi hotspot that doesn’t require a password. Once you’re connected, the scammer can access virtually any information you send over the network. If you log into your online bank or check your credit card balance, the scammer can get your username and password. If you place a mobile order, the scammer can get all your credit card and personal information. They can sometimes even access information in your browser history or decrypt information sent over through secure websites.
How to Avoid Being Scammed
We take for granted that our credit cards are safe when we swipe our credit cards or hand them to a cashier to fund transactions. However, there’s a risk that credit card information is being stolen when it’s swiped to pay for goods or services.
How the Scam Works
With credit card skimming, the scammer captures your credit card on an otherwise legitimate transaction. Scammers may place a skimming device over a regular credit card processing terminal. Gas stations and ATMs have been a long time favorite for scammers looking to place skimming devices. More recently, scammers have started placing skimmers over the credit card readers in self-checkout lanes at major retailers.
Sometimes cashiers and waitresses have been recruited to be part of a skimming ring. They swipe your credit card through a handheld skimming device when you’re not looking.
Once your credit card information has been “skimmed,” scammers can use it to create fake credit cards and make fraudulent charges on your account.
How to Avoid Being Scammed
