The credit card industry has always been a target for hackers and thieves. I was. And that is unlikely to change anytime soon. Unfortunately, the most common scams have changed with technology. In other words, scammers are always coming up with new tricks to catch the public off guard.
According to Javelin Research's 2021 His Identity Theft Study, most of the scammers ranged from counterfeiting credit cards to more serious crimes like identity theft and savings account hijacking. moving to serious crime. Meanwhile, criminals are increasingly targeting consumers directly with scams aimed at getting them to reveal personal information that allows hackers to take over their identities.
What the Future Holds No one knows, but it's safe.Financial fraud is a headache and causes financial loss. Still, if you're careful, you don't have to be a victim. Learn more about the biggest credit card scams to watch out for in 2023 and how to protect yourself.
1. Identity theft
In the past, criminals While the focus was on executing fraud, data collected from Javelin Research shows that hackers are increasingly focusing on defrauding individual consumers. . Individuals often end up interacting with criminals via email, text message, or phone, but with more people staying home during the pandemic, this is easier to achieve.
“Criminals follow current events, but unfortunately, in a Pandemic 2021 press release, Kathy Stokes, director of AARP Fraud Watch Network, said: “Empowering consumers to understand how to spot the red flags of fraud is a critical step in stopping fraud before it happens.”
According to experts, you may be able to avoid identity theft scams if you know what to look for. For example, you should be wary of companies that contact you by phone, text, or email for any reason. And watch out for “misspelled email addresses, suspicious requests for money, and random messages from criminals claiming to be financial institutions via social media,” said Javelin Research experts.
2. Digital Payment Fraud
Over the past few years, the COVID-19 pandemic has forced more people to stay home and more people to use digital payment products than ever before. Of course, hackers and thieves never miss an opportunity. They changed their behavior to keep up with this trend.
According to Javelin Research, losses have been associated with digital wallets and peer-to-peer (P2P) accounts. spiked. “This was particularly evident in the cases of stimulus payment fraud, unemployment benefits fraud and identity fraud,” it wrote.
3. Credit Card Interest Rate Reduction Fraud
Credit card interest rate deduction scams occur when the caller implies that the company has a special relationship with the card issuer to help secure low interest rates. The Federal Trade Commission (FTC) says consumers who receive such calls should “listen with extreme skepticism and delete them.”
Why? By and large, robocalls that promise to lower interest rates are always a scam. No one can do for your interest what you can't do for yourself, no matter what the company claims. The FTC recommends calling your card issuer to request a lower interest rate from your card issuer.
According to the FTC, individuals who are tricked into paying lower interest rates to third-party companies never see their promised savings and struggle to get refunds. Not only that, but providing your credit card information to one of these companies can expose you to other types of fraud, such as using your credit card number to make unauthorized purchases.
Phishing schemes have been around for a long time and remain a significant problem, according to Chris McHargue, former principal fraud consultant for the financial services industry at SAS. Phishing can take a number of different forms, but typically it involves scammers contacting targeted victims by phone or to extract card, account, banking credentials, or other personal information. occurs when you contact us online through a social engineering scheme.
The original contact may appear to be an email from a company you use, or you may receive a call that sounds legitimate but asks you to provide personal or credit card details. . According to McHargue, this information is used to conduct fraudulent activities on the Internet, such as using card details for e-commerce transactions and using banking credentials to move money through online banking. used for “They even open credit card accounts in the victim's name,” he said.
Schemes of this sort often target vulnerable older people who are less tech savvy.
5. Social Security Benefit Fraud
According to Ahren Tiller, an attorney at The Bankrupcy Law Center, another credit card scam to watch out for involves Social Security benefits. Tiller pointed out that the scammer called, pretending to be the Social Security Administration, and the next time he could say one of two things.
In both cases, the scammers want your credit card details and bank account information. However, there are some red flags to watch out for. For example, they may ask you to provide personal information or social security number in a hurry, which is never a good sign.
Also, fake caller ID or official-sounding names to try to trick users, Tiller said. Additionally, scammers may require payment to receive rewards or provide fake bank routing numbers to deposit rewards.
“If any of these occur,
6. Government Impersonation Scams
Another scam to watch out for is when criminals impersonate employees of the Federal Deposit Insurance Corporation (FDIC) or other government agencies. In some cases, they even use the real names of government officials to appear more legitimate.
The FDIC notes that the agency does not send unsolicited communications soliciting money or sensitive personal information.
“Government agencies will not require gift cards, wire transfers, or payments in digital currency,” he wrote, the FDIC. “The FDIC will never ask for personal information such as bank account information, credit or debit card numbers, social security numbers, or passwords.”
How to protect yourself from credit card fraud
While there are many credit card scams to watch out for, there are many ways to avoid them. These tips will help you avoid becoming a victim of credit card fraud and other types of fraud.
- Sign up for our free credit monitoring service. Credit monitoring services provide a way to monitor and alert on credit report activity. You can also check your credit reports from all three credit bureaus once a year for free at AnnualCreditReport.com. This is a good way to stop fraud early.
- Check your bank statement regularly. “You may be charged a fee of $0.01 or a very low amount,” McHargue said. “This is a common tactic used by scammers to verify accounts.” Make bigger claims.
- Freeze the credits. When you freeze each credit report, no credit bureau, no one can open a new account in your name—not even you. You can unfreeze your credit when you need it.
- Set alerts on your credit account. Set alerts to notify you when a purchase is made on an existing account. If you haven't made the purchase, you can notify your bank and take steps to cancel and protect your account immediately.
- Be careful when using public Wi-Fi. Nishank Khanna, a former employee of Clarify Capital, said that an unsecured internet connection puts your personal information at risk of being stolen. “Some particularly clever thieves may steal information by generating pop-ups on the screen to enter card information or by stealing saved card information from a computer,” he said. rice field. If you use public Wi-Fi a lot, it makes sense to pay for a virtual private network (VPN).
- Set up multi-factor authentication. Credit card accounts and other financial accounts with multi-factor authentication can protect you from fraud. but this makes your account more secure.
- Avoid telephone solicitations. According to Tiller, avoiding telemarketing altogether isn't a bad idea. “If you get a call from a number you don't know, don't answer,” he said. “Legitimate government agencies will not ask for information over the phone unless you first contact them.”
What to do if you think you've been scammed
The good news about most types of credit card fraud is that consumers usually don't get in trouble. Although the Fair Credit Billing Act (FCBA) protection limits a consumer's liability for fraudulent charges to $50, most credit cards have a $0 fraud liability policy.
However, if you are a victim of credit card fraud or believe that your information has been compromised, we encourage you to notify your card issuer as soon as possible. Customer representatives have the authority to freeze accounts or cancel cards outright. At that point, the lender will typically initiate an investigation and refund the lost funds. However, this is only true if you discover the fraudulent activity and report it within a reasonable timeline (usually he is 60 days).
Still, canceling the card may not be enough. This is because your information may also have been compromised. Therefore, you should carefully monitor your credit report to make sure that no one has falsely claimed your identity or opened a fake account.
If fraud is found on your credit report, the Consumer Financial Protection Bureau (CFPB) recommends placing fraud warnings on all three bureaus' credit reports. You can also consider freezing your credit report with Experian, Equifax, or TransUnion. You can do this for free.
Finally, if he encounters fraud, he must report it to the FTC. Because the FTC can use this information to identify trends.
“If you've been scammed, report him to the FTC at ReportFraud.ftc.gov,” he advises the FTC.
By keeping an eye on your accounts and credit reports and being skeptical of calls and social media messages asking about your accounts (or pretending to be a bank), You can protect yourself from fraud. ) and personal information (including credit card details) safe. If you find that any of your information has been compromised, please report it immediately to the issuer to close your account, then to the FTC and possibly to local law enforcement. .