The Most Popular Credit Card Scams
There’s more to being financially responsible than budgeting. Staying on top of your finances also means knowing how to keep your money and personal information safe from the prying eyes of would-be scammers and thieves. In most cases, credit card scams depend on catching you off guard; using fear and stress to convince you to hand over your money, PIN, or credit card number.
The best way to avoid becoming a victim? Knowing what to look for – and being familiar with the most common types of financial or credit card scams. Here’s a list of some popular methods:
- I’ve mentioned skimming before (you can check out this article to get the full scoop on skimming) – but it’s worth noting again. Skimming devices are showing up everywhere from gas stations to ATM machines to vending machines to grocery store self-checkout terminals. Before you swipe your card, take a closer look at the card reader. If it looks like it’s been tampered with, use another machine or pay cash instead.
- Fake jury duty phone calls. You get a phone call from someone who claims to represent the government. This person informs you that you failed to show up for jury duty, and, unless you want to risk jail time or some other scary-sounding punishment, you need to pay a fine. Right now. With your credit card.
While it’s definitely scary to get a call threatening you with jail time, it’s important to stay calm and rational – and don’t let fear cloud your judgment. You’d probably know it if you were called to jury duty. And even if, for some reason, you really did miss jury duty, you’d receive notice in writing. If you want to be extra sure that the call is fake, contact the court directly and ask about it.
- Computer hacking/virus scam. This telephone scam pops up every few years, and it disproportionately affects older folks who may be less tech-savvy than their younger counterparts. It works like this: A scammer calls you and identifies his- or herself as an employee of Microsoft (or Apple, or Geek Squad, or anything else they think sounds legit). They tell you they’ve detected some sort of serious problem with your computer. Luckily, they can fix it – all they need is your personal information, a password or two, and a credit card number.
There is nobody out there waiting to intervene if you get a computer virus. And it’s not common practice for tech support to make the first move when issues arise. But if you’re not super comfortable using technology, you might not know that. This is important to keep in mind if you have any older relatives who might be at risk for a scam like this.
- The electric bill scam. This scam is similar to the jury duty scam: Someone calls you, pretending to be your electricity provider. They tell you that you’re behind on your bill – and unless you give them your credit or debit card number to pay up right now, they’re cutting you off.
First of all, this is not how most utility companies operate: Typically, if a customer falls behind on payments, utility companies send a letter or an email. And second, if you do get a phone call, it’s likely to be a recording, not a real person threatening to cut off your service. Scammers are hoping that they can scare you into giving up an account number or two. If you have any questions or concerns about your utility bill, you should call your electricity provider and talk to a representative. And if you get a phony “late electric bill” call, you should notify the local police so they can get the word out.
- Debt consolidation scams. You get a call from someone claiming to work for a debt consolidation service, and they’ve got good news for you: They can help you get rid of your high-interest credit card debt. All they need is a substantial down payment, your account number(s), and your contact information – and you’ll be debt-free.
Here’s the thing: Debt consolidation is a real service – that’s why this scam can be especially problematic. So, how do you tell the real deal from the fly-by-night fakes? First, slow down. Do some research. Does the company have a website? Customer reviews? Complaints? Do they have any professional certifications or accreditations? Are they offering things that sound too good to be true, like promising to slash your annual interest rate or cut thousands of dollars off of what you owe? Are they demanding a large, up-front payment before they provide any services?
A real debt consolidation company will typically offer you some sort of free consultation – and they won’t promise to you some kind if one-size-fits-all quick fix, either.
Bottom line: If you’re looking for debt counseling, don’t make any hasty decisions. Do your homework. Check out the company’s history and its Better Business Bureau rating. And don’t let yourself feel pressured into making a hasty – and costly – mistake.
- Fraudulent “fraud alerts.” A favorite with scammers, typically sent via email or text message. A typical fake fraud alert tells you that there has been suspicious activity on your account, or that your account information may have been compromised as the result of a data breach or something like that. And, unfortunately, fake fraud alerts can be especially tricky, because they often look like the real deal. But the fakes contain links to malware, spyware, or viruses – or they try to get you to provide your account number, PIN, or other personal details.
But there are a few critical differences that can help you spot a fake: Real fraud alerts don’t ask you to provide account information via email, so that’s a major red flag. In addition, fraud emails – even ones that have logos or images resembling the real thing – are often riddled with typos, misspelled words, or punctuation errors. If you can’t tell, the easiest thing to do is contact customer service and ask: If the alert was real, they can explain next steps and give you more information about the problem. If the alert was fake, they’ll be glad you brought it to their attention.
- Chip card confirmation scams. This is a relatively new one. Here’s how it works: Scammers call you pretending to be your bank or credit card company, and they tell you they’re getting ready to send you a new replacement chip card. All they need is to verify a few details, like your name, address, account number, the security code on the back of your card, your PIN number, and so on.
By now, it’s likely that you’ve gotten a replacement chip card or two, and you know probably that’s not how this process works: Your bank or credit card company already has your information; they don’t need to verify anything. In most cases, you’ll receive a letter or an email notifying you that a new card is on the way. The letter usually tells you when you should receive your new card, and what you should do if you don’t receive it. After that, your new card arrives in the mail. It’s simple, and there’s no “verification” needed.
When it comes to credit card scams, prevention and awareness are critical. Be cautious about anyone who calls or emails asking for account numbers or personal information. And remember, you can always reach out to Debt Guru for more advice about money, budgeting, and credit cards. Contact the Debt Guru team today for a free debt relief consolidation consultation.