In the United States, more than 200 million people have at least one credit card; certain studies suggest that the average person has 2.7 or more credit cards. The use of credit cards in the U.S. is ubiquitous and a core part of day to day life. Over time this has attracted the attention of criminals seeking to take advantage of the sheer scale of the credit card market through a growing list of scams. Approximately 30 percent of consumers have been victims of credit card scams over the last five years. This article will provide an overview of 3 common credit card scams and give some tips on how to protect yourself from falling victim.
Interest Rate or Bonus Scams
Have you ever received a phone call or email with a message suggesting that you have qualified for a lower interest rate or special bonus? Don’t trust such emails or calls. Their only purpose is to extract personal information, including financial information and details to use that information to scam you. Although there are legitimate companies that can help you lower the rates you pay on credit card debt, this isn’t the way they typically conduct their business. Such calls or requests should never be entertained, and at a minimum, you should refrain from providing any personal information over the phone. A common way to lower the rate of interest you pay is through balance transfers or debt consolidation.
Phishing emails and texts have significantly grown in popularity in recent years. Estimates show that consumers lost more than $56 billion due to phishing in 2020. These scams work similarly to overcharging scams as they involve receiving a text message or email that appears authentic but is coming from a bad actor. In terms of emails, the email you receive will be designed to look very convincing with appropriate logos, names, and other such details. However, these emails embed links that send the recipient to a fraudulent website where they are asked to provide personal information such as their name, social security details, and date of birth. These sites will look authentic, but they are fake and were created by scammers to trick consumers. The scammer’s objective is to get you to provide personal information, which they can then use to steal your identity, access your financial accounts, make purchases using your credit cards and accounts or all the above. Phishing Scams are especially pervasive because they can impact your credit cards and all financial accounts. For example, recently, there has been a rise in scams associated with Zelle, the popular payments service, the majority of which involve a sophisticated form of phishing. As the number of banks that use Zelle has increased exponentially, it has seemingly gotten the attention of bad actors like the way credit cards have over the years.
The way to avoid falling victim to these scams is to always look at the sender’s email address and make sure it comes from a real email address. For example, email@example.com is genuine, but firstname.lastname@example.org is clearly not from Netflix. It is also advisable to not click links that appear in emails unless you’re sure of the source. Before clicking, look at the URL to ensure that it is authentic. To continue using the previous example, the URL https://www.netflix.com is authentic, but https://www.nettflix.com is clearly fraudulent. With Phishing scams, the scammers will use URLs that look very similar to trick consumers into clicking them.
This is one of the most popular credit card scams. How it usually occurs is a consumer receives a call, text, or email claiming that their credit card has been incorrectly charged for an item. The consumer is prompted to follow the steps in order to get refunded. As part of the process, the consumer must enter sensitive information such as their social security number or bank account details, all designed to allow the perpetrators to access your information. This scam can be a little hard to identify as it usually involves a product or service that you have used in the past, so the scammer citing a company you transacted with could make them seem legitimate. Scammers often emulate brands that are well known, such as Amazon and Netflix, and so it’s really just a numbers game for them since a large number of people are likely to have subscribed to such services. The best way to protect your interest is to never provide sensitive information when you receive an unsolicited call, even if it is from a caller than you think you know.
Final Thoughts: Awareness and Diligence
The first step to protecting yourself from these scams is to be aware of them and to understand how they work. The second step is to be diligent when responding to a text message or email or following a prompt from an unsolicited message. Third, pay close attention to the sender’s details and be extra cautious. Finally, never give out your private information, such as your social security number, to anyone, and be especially careful about entering that information into unknown websites.
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