Credit card

The biggest credit card scams to watch out for in 2022

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Nobody wants to be the victim of a credit card scam. Unfortunately, the truth is that credit card fraud may be more prevalent than most Americans realize — and it’s not just seniors who are being targeted. Between 2017 and 2021, the number of scam victims under the age of 20 increased by more than 1,000%.

Knowing some of the most common credit card scams and how they work can help consumers avoid these instances of fraud. In fact, monitoring and protecting accounts against fraud is an important way to protect credit scores. Here are the credit card scams that consumers may face.

Overload scams

Excessive fee scams are a common form of fraud that typically begins with an unsolicited phishing attempt to obtain a credit card holder’s personal information. In this scam, which is often carried out via text message, a fraudster sends a message to his victim claiming that the recipient’s account has been overcharged.

The scammer may pretend to be from a legitimate company that the victim made purchases from, such as popular subscription services such as AT&T or Netflix. When the victim responds, the scammer solicits their credit card information under the guise of processing a refund.

To avoid this scam, credit card holders should be aware that legitimate companies generally do not encourage customers to provide sensitive personal information over the phone or through an unsecured online platform. Those who receive this type of “cold call” should start by checking their credit card statement to see if they can identify the illegitimate charge.

In most cases, there will be no such charges and consumers can safely remove and block the scammer. If there are charges but the cardholder believes they are not accurate, they should contact the merchant directly to discuss the situation.

Skimming

Skimming, another common credit card scam, can be difficult to avoid because it doesn’t involve easy-to-spot phishing attempts. Skimmers hack payment readers by installing data-collecting devices that collect card information without the owner’s knowledge or consent.

Most scammers install these devices on ATMs and payment machines that are unlikely to be monitored, such as machines at gas stations or those located behind buildings and away from street lights. When a victim inserts their credit card into the tapped machine, it records their credit card information and they walk away unaware that they have been the victim of a crime.

Spotting a skimming attempt can be difficult. Credit card skimming has continued beyond the introduction of EMV cards, and many skimming devices can now be placed inside the machine itself.

Credit card owners should be aware of risky places to swipe their cards and examine any payment device they use. They have to look for incompatible graphics and fonts that don’t match the rest of the machine. People should also cover their hands when entering their PIN. Using a mobile payment option like Apple Pay can also help users avoid skimming.

Arrest Scams

Arrest scams are another common credit card fraud tactic that tricks victims into sending money to scammers to pay off an imaginary debt. In an arrest scam, the criminal will contact the victim, fraudulently claiming to be a member of law enforcement. The scammer may say they are a member of a legitimate government office – like the FBI or IRS – or they may loosely refer to themselves as “local police”.

The fraudster claims that there is a warrant for the victim’s arrest if he does not immediately repay a fine, debt or fictitious judgment. Once the victim responds, the scammer urges them to provide their credit card information or face arrest.

Credit card holders should be aware that the US government will only legally summon citizens through written documents. Even if an individual has a legitimate warrant for their arrest, local law enforcement will never call a wanted suspect to advise them by telephone of an active warrant.

Instead, an agent usually serves physical documents in person. Federal and state law enforcement will also never ask for credit card information over the phone.

Final take

Credit card users who notice fraudulent activity on their account statements should immediately contact the company issuing the charge to dispute it. Most credit cards include clauses in their terms stating that the customer is not responsible for charges to the account that the cardholder did not authorize.

There are several ways for cardholders to protect themselves against future fraud. For one thing, they should review their credit reports to identify areas of potential fraud. If users notice anything unauthorized on their credit file, they should contact each of the three major credit bureaus individually to dispute and remove each fraudulent transaction.

Individuals may also want to put a transaction alert on the compromised credit card for some time after the incidence of fraud. This alert will notify credit cardholders each time a new purchase is made with the card, allowing them to catch and report any future fraud on their account immediately.

Credit Card Scam FAQs

Here are some frequently asked questions about credit card fraud.

  • How do credit card scams happen?
    • Credit card scams occur when someone other than an authorized user on a credit card account accesses the card and uses it to make purchases. Most scams occur after a criminal phishes cardholder data by tricking them into providing their credit card information over the phone, text or email.
  • How can someone use my credit card without having it?
    • Criminals can ruin the hard work a cardholder has put in to build their credit. Unfortunately, the only things scammers need to use a credit card are the card number, the security code on the back of the card, and the zip code of the primary cardholder. Once the scammers collect all this information over the phone or email, they can easily use it to make purchases online or over the phone.

Information is accurate as of October 6, 2022.

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