Credit card fraud losses reached a staggering $28.63 billion in 2022, according to the Nilson Report, meaning scammers are stealing more money than ever before from credit card holders. In today’s digital world, it’s more important than ever to be vigilant and protect yourself from credit card scams.
Scammers are always coming up with new ways to trick people, but the most common tactics involve unsolicited calls, emails and text messages. Scammers may pose as representatives from your bank or credit card company, or they may try to scare you into giving them your personal information by claiming that your account has been compromised.
No matter what tactic the scammers use, the goal is always the same: to get your credit card information. Once they have your information, they can use it to make unauthorized charges or even steal your identity.
Let’s go over some of the most common credit card scams and tips on how to avoid them.
Jury Duty & Police Scams
Scammers may call, email or text you claiming to be from a local court or police department. They may say that you missed jury duty or have unpaid fines and that a warrant has been issued for your arrest—and that the only way you can clear up the issue or pay your fines is by giving them your credit card information.
Courts and police departments will never contact you to demand payment over the phone, email or text. If you receive a communication like this, do not provide any personal information or make any payments. Instead, you should immediately notify your local Clerk of Court’s office.
Debt Reduction Program Scams
In this scam, people are promised immediate credit card debt relief or lower interest rates from the scammer in exchange for an upfront fee.
The Federal Trade Commission (FTC) has highlighted cases of debt relief service scams that target consumers with high credit card debt. Scammers may claim to negotiate with creditors to settle or reduce your debt on your behalf with no intention of ever acting on it. These operations often charge cash-strapped consumers a large upfront fee, but provide little to no service at all. The FTC has brought dozens of law enforcement actions against these false credit-related services.
Skimming scams involve thieves attaching devices to gas pumps and ATMs that steal card numbers. For example, in San Diego in 2022, three men were sentenced to prison for a $1 million nationwide skimming fraud scheme in which they planted skimmers on gas pumps and ATMs that stole the personal account information from their victims. They then used the stolen data to create fake debit and credit cards to withdraw money from their victims’ accounts or purchase money orders from the post office.
Fraud Department Scams
Fraud department scams involve scammers contacting you claiming that your card has been compromised, then stealing your information when you verify the numbers and personal details. For example, unsuspecting people have received calls from scammers posing as representatives from their bank asking for verification, which has led to unauthorized transactions.
Another example of this scam involves scammers pretending to be from the IRS and sending phishing emails designed to trick taxpayers into revealing personal and financial information. These emails, which appear to be official communications from the IRS or related entities, contain links to a fake website that looks like the official IRS website.
Be wary of any unsolicited calls or emails asking for your financial information, and never click on links in suspicious emails. If you believe you may have been scammed, update your IRS e-file credentials immediately.
Credit Card “Cleaning” Scams
In the credit card cleaning scam, fraudsters offer to clean the magnetic strip on your card to make it easier to read, but instead skim it to steal your account information. Victims are led to believe their card is secure, only to find unauthorized transactions later.
Lottery and Prize Scams
Lottery and prize scams involve scammers informing people that they have won a lottery, sweepstakes or prize and asking for payment or personal information to claim the winnings.
Late Utility Bill Scams
Late utility bill scams can be incredibly convincing. Scammers pose as your utility company and threaten to shut off your services unless you make an immediate payment. They often ask for payment through methods like wire transfer, reloadable debit cards, gift cards or cryptocurrencies, as they are difficult to trace and almost impossible to recover.
Computer Technical Support Scams
Tech support scammers typically claim to be representatives from a computer company like Microsoft and state that they have detected a virus on your computer and can remove it for an upfront credit card payment. Scammers may call you directly and even change the caller ID to display a legitimate tech support phone number.
The Federal Trade Commission (FTC) has detailed information on how to spot, avoid, and report tech support scams. For more information, visit the FTC’s official page on tech support scams.
In this scam, fraudsters pose as IRS agents claiming that you owe back taxes payable by credit card or that you may receive your tax refund by having it loaded onto your debit card. This scam has surged, especially during tax season, with many people reporting calls from ‘IRS agents’ demanding immediate payment. Please remember that the IRS will not ask for your credit card information over the phone.
Charity scammers pose as charities to solicit donations. These scams often surge during natural disasters, exploiting people’s generosity.
So, what can you do?
Protect Yourself & Stay Informed
Credit card scams can be devastating, but there are steps you can take to protect yourself. By staying informed about the latest scams and knowing how to respond, you can reduce your risk of becoming a victim. Here are a few key things to remember:
- Be wary of unsolicited calls, emails and texts. If it seems suspicious, ignore it.
- Never give out your credit card information over the phone or email. If you’re unsure whether a call or email is legitimate, contact the company directly using a phone number or email address that you know is correct.
- Make sure the websites you enter your credit card information on are reputable.
- Monitor your credit card statements regularly. This will help you to quickly identify any unauthorized transactions.
If you think you may be a victim of a credit card scam, contact your credit card company immediately. They can help you cancel your card and dispute any unauthorized charges.