Modern technology gives scammers fertile new ground to ply their age-old trade. Here's a look at the telltale signs of common card cons and how to protect yourself from them. Con artists love credit cards. They snatch receipts and personal identification numbers, dive through Dumpsters and share information over the Internet. Scammers are very creative so they will take an old con and give it a new twist. Some go high-tech, employing texting, cameras or software while others embrace the old ways, using nothing but email or a telephone. Here are nine popular credit card scams, with clues on how you can recognize them before it's too late:
1. We Can Lower Your Rate
The caller gives you the good news: You can get a lower interest rate on your card. For an upfront charge, sometimes as much as $500, the caller promises a deal. They can deliver, they say, because they have the right contacts or a special relationship with the card issuer. They may even claim to be from "card member services," "card services" or "cardholder services”. Consumers who agree are charged the upfront fee, but those making the promises fail to deliver. The states and the federal government are putting the word out to consumers: Don't pay someone hundreds of dollars for something you can do yourself. In some cases it's a ruse to collect your financial information but in others it may be an actual business that's simply charging a huge fee for something you could do yourself. These are the signs that the call is not what you think: If this is truly a division of the issuer, you won't have to pay a fee to get a lower rate. If this is a legitimate outside company, it can't do anything you can't already do for free, such as call up and ask for a lower rate. And beware if the word "guarantee" is prominently mentioned. No one can guarantee you a lower rate.
2. The Fake Freeze
You get an "emergency" text: There's a problem with your account. Your card has been frozen, and you need to call this number. When you phone, you're prompted to enter your card number and other information. What's really going on is that crooks are collecting information so that they can use the card. This one is especially heartbreaking when criminals target people receiving disability benefits that were loaded onto debit cards since the minute the con man gets the information the account is drained. Avoid this by never using phone numbers or contact information that someone gives you in an e-mail, text or phone call. Instead, look up the card contact information yourself (from a monthly statement, on the back of the card, etc.) Then call and find out what's really going on.
3. The Three-Digit Con
You get a call from your credit card's issuing bank. There have been some problems with security, or they've noticed unusual charges and they need to confirm your information. The real purpose of the call is to get the three-digit security number on the back of your card. They may have some of your data already, which means they've either bought some of your information online, gone Dumpster diving or picked up one of your old receipts.
4. Free Games! Free Music! Free Porn!
You're online and find free music, games or porn. But that download could come with a keystroke logger. That's a malicious little piece of software that will note your private passwords and other information (such as card numbers), and send it back to the scam artist. The best protection in this case is to keep your security program updated; It has to be done automatically and regularly. There's not much of a problem with legitimate websites but the offer to download free music or free games should wave a red flag.
5. Come To Our Spoof Site!
You get an e-mail from your bank, PayPal or your favorite store telling you that there is a problem with your account or there's been a security breach or your order's ready. Whatever it is, just click this link to get more information or pay for your order. Watch out – the email is a fake and so is the site on the other end of that link. Some of the e-mails look real and a lot of people respond. The best way to protect yourself is to hit “Delete”. If it's a vendor from a place where you have an account or are expecting an order, go to the real site yourself, NOT through a link.
6. Bad credit? No income? No problem
This credit card premise sounds great: $0 fees, 0% APR, and a hefty credit limit. And if you've had some financial problems, it doesn't even matter. However, chances are it's one of a couple of scams and the catch is buried in the fine print, if it's revealed at all. Usually the card is good only for items in the company's catalog, which are marked up well beyond the norm. In most cases the "cash advance" feature of the card turns out to be an application for a payday loan. Even worse the company deducts hundreds in fees directly from consumers' bank accounts since they have this information from the application for the card. Since consumers are not expecting the bank drafts many don’t have enough money in their accounts to cover them, so they are also hit with overdraft charges from their banks. The end result is a pile of debt and a card they never used.
7. Bad Credit - Part II
In another twist on the "bad credit, no problem" script, the card is actually a secured credit card. Unlike legitimate secured cards, the fact that it's secured is buried in the promotional fine print or omitted, and these scam versions sport hundreds of dollars in fees which render them nearly maxed out from the beginning. Consumers encounter these "bad credit" card schemes in a number ways - the companies may buy lists of the recently bankrupt and call or send an e-mail or snail mail or they may place an ad and wait for the phone to ring. The best protection against this scam is to ask yourself why a company would issue you a card when your finances and credit rating are in the “toilet”. Something isn’t right and you better look pretty carefully at the “whole deal”.
8. Tag-Alongs
You're shopping online and suddenly you're presented with a free trial offer for another product or service. It’s free so why not try it. Before you know it they're debiting your bank account every month. Often called "pass-throughs" or "affiliate marketing," these are third-party vendors who are piggybacking on the original transaction. It can be a scam or a real business but it's a really bad practice for consumers. Depending on the company, the charges could be just a few dollars but it can be much, much more. In many instances people accept the offers but don't realize they had to actively cancel if they didn't want to be charged after the trial period ended. In other cases people didn't accept the offer but the charges were simply billed to their accounts. To protect yourself just say no to those free trial offers and be sure to look carefully at your credit card statements every month. If you find charges you and your family don't recognize, report them to your card company immediately.
9. Skimmer Scammers
You're ready to pop your card into the reader at the ATM or gas pump but something looks a little off. The keypad looks different or the machine looks funny, especially if it is an ATM that you use regularly. The answer is that criminals can install overlays that cover the real machinery and most consumers don't realize they are putting their cards into these fake overlays. To prevent problems look for exposed edges and don't be afraid to get physical. Pull on exposed edges or flimsy looking attachments. While crooks may do a good job cosmetically the fakes often aren't that durable. Since crooks also need your PIN, there may be a spotter with a camera, or a camera planted nearby. So be on the lookout for items that don't belong or aren't usually there (such as a trash can), or someone hanging around.
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