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Credit Card Scams: What You Need to Know

Credit card scams

Consumers use their credit cards frequently during the holiday season, and that means this time of year also brings credit card scams. Scammers try to trick people when they’re busy with holiday shopping and less likely to scrutinize solicitations with the caution they would use during calmer times. To avoid being victimized, learn what some common scams look like and how to protect yourself.

Scams Claiming to Protect You From Fraud

Scammers prey on consumers’ fears, including the fear of scammers. That’s right—shameless scammers actually pretend to protect people from fraud as they steal financial information. Here’s how such a scam works: You receive a robocall, email, or text message saying that your credit card account has been compromised. The message tells you to call a number to secure your account or to remove a hold on it. If you call the number, the scammer asks you to provide account information, ostensibly to confirm your identity. In this way, the scammer collects sensitive data from unsuspecting consumers, and he can turn around and use it to make purchases in their names.

Scams Claiming to Offer Incredible Sales

Some scammers take advantage of people looking for deals on popular products. They send emails announcing unbelievable discounts on brand-name goods or other highly sought-after items. The email usually warns that the offer is only available for a short time, like 12 hours or a day. This is a ploy to induce people to respond immediately instead of researching the supposed deal. If you click on the link in the email, you’re directed to a website that may look similar to a major retail or auction site. The site prompts you to enter your credit card information, after which it promises to ship the advertised item. In reality, the scammer is not selling any products and simply steals account data from this fake transaction.

Scams Claiming to Negotiate Lower Interest Rates

Other scammers call consumers and claim that they can negotiate better interest rates on credit cards. They pretend to have special relationships with credit card companies and promise that, for a fee of several hundred dollars, they’ll use their influence to get you lower monthly payments. The Federal Trade Commission explains that in fact, these scammers have no advantage in negotiations, and their promised rate reductions usually don’t materialize. Consumers who want to negotiate with their credit card issuers can do that themselves without paying any fees.

How to Protect Yourself

Protect yourself from credit card scams by monitoring all your accounts, including accounts you don’t use frequently. Pay special attention to store credit cards, because they are attractive to scammers during the holiday season. When you receive messages purporting to be from banks, credit card companies, or retailers, don’t use the contact information given in the message, and don’t click on any links in emails. Instead, look up the company’s phone number, or type its URL into your Web browser. Once you have made contact with a company representative, tell her about the call or email you received, and ask if it’s a legitimate message from the company.

If you think you may have given credit card information to a scammer, call your credit card company immediately. The company can block anyone from using your card and can issue you another card with a new number. In addition, you’ll be able to dispute any fraudulent charges that may have been posted to your account so you can get them removed.

Image source: Flickr

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