biggest credit card scams

Biggest Credit Card Scams in 2022

August 18, 2022

Scams have been a common evil in the credit card industry since the payment method was invented. However, with the evolution of technology and the adoption of more robust security methods, scammers have resorted to more devious techniques to get ahold of your information.

To protect yourself against credit card scams in 2022, you must be aware of these methods and how to combat them.

This article will identify the most common credit card scam methods and reveal the steps to follow if you are taken advantage of by a scam.

6 Common Credit Scams to Look Out for in 2022

You can encounter many types of scams, but these six are ones you should always watch out for:

  1. The Charity Scam

One of the most challenging scams to recognize is the charity donation scam. You will receive a phone call from someone claiming to be from a charity, explaining why your donation is needed and asking for a payment, which is when your credit card information is stolen.

Avoiding charity scams

Never share your credit card information with an unknown individual or institution, even if they seem legitimate. Take note of any information they provide you, then politely hang up. Look up the phone number on the Internet, putting quotation marks around it. There is a good chance that the number that called you has already been identified as a scam caller. You can donate directly through the website of a legitimate charity if you wish to help.

  1. The Hotspot Scam

Public Wi-Fi networks should be used cautiously since scammers could monitor them. There are times, however, when the network itself is a trap, carefully crafted by credit card scammers.

When you connect to a “public Wi-Fi hotspot” on your smartphone or laptop, you are asked for credit card information in this credit card scam. The hotspot is fake, and the scammers get your credit card information directly. Other times, the hotspot offers internet access for free, but scammers monitor your every move. The hackers record your passwords, peek into your bank account when you check it and capture your data.

Avoiding hotspot scams

Ask an employee for the correct network name and password if you need to access public Wi-Fi at a restaurant or store. Avoid logging into your bank account or providing sensitive information if you can. Avoid generic-sounding names like “Free Public Wi-Fi.”

  1. The Credit Card ‘Sign-Up Farm’ Scam

Credit card scam victims are often willing participants, lured by the promise of easy money if they help generate what they believe to be legitimate rewards. This scam is designed to rip off card issuers on a large scale.

People who run these scams recruit people with good credit and offer to pay them for using their Social Security numbers to open credit cards. Scammers rack up huge card balances, convert the points to cash, and cancel purchases. Sometimes they don’t bother canceling, leaving the victim on the hook.

Payments of $1,000 to $10,000 are typically promised to victims for their information, although some never receive them. In addition, they are told that the card spending is legitimate, even though the whole point is to defraud the issuer. The victims can be liable for huge balances, have their credit ruined, and have their credit cards and airline rewards frozen.

Avoiding the scam of signing up for a farm

Those struggling financially may find it hard to resist the lure of easy money. However, one should assume that easy money does not exist.

To avoid credit card farming scams, never share your Social Security number or any other personally identifiable information. You can check your credit report for free to ensure no one is using your identity to open accounts without your knowledge.

  1. The Interest Rate Scam

It is common these days to receive robocalls. Interest rate reduction scams are a type of call that is becoming increasingly common. They involve an unknown number calling you with a recorded message claiming you can negotiate your credit card interest rates to dramatically lower them. However, this is not true.

As a result, they claim they have relationships with credit card companies and can lower your interest rate and reduce your payments by thousands of dollars. As soon as they get your attention, they’ll ask for your credit card and personal information. 

Avoiding the interest rate scam

Contact your credit card company directly if you want to reduce your interest rate. They are the ones who can give you the proper answer on whether this could happen. It would be best if you hung up on anyone who makes a similar promise.

  1. The Overcharge Scam

Credit card overcharge scams are rising because we continue moving away from cash and in-person transactions to credit card swiping and online shopping. With this scam, someone will contact you, claiming that an overcharge was made on your credit card on a recent purchase, either via text or call. The caller will attempt to solicit your personal information through a series of questions.

According to the Better Business Bureau, the scammers usually address their victims by name in this scam. Since credit card purchases are prevalent, the recent purchase line doesn’t sound unreasonable to most people.

Avoiding the overcharge scam

Don’t give out sensitive personal information over the phone. Put the phone down. Pay attention to your credit card statement. Call the number on the back of your credit card if something seems amiss.

  1. The Skim Scam

Skimming has remained relevant as a popular credit card scam as more businesses go cashless and more consumers pay with credit or debit cards.

When you insert your card at a gas pump, ATM, or other location, a skimmer reads the information from the stripe of your card, which is an electronic device. By capturing that information, the person who set up the device can use or sell your credit card information.

Avoiding the skim scam

Before inserting your credit card, inspect the reader for any tampering before inserting your card, or start using a mobile wallet (which connects your credit card and then allows you to pay with your phone). 

What to Do If You Fall for a Scam?

Awareness of the different scam methods and avoiding them is essential for protecting yourself, but sometimes you can fall for a scam even if you know what to expect. If you recently found yourself the victim of a scam, follow these steps:

  1. Contact Your Bank

Contact your bank or credit card company and ask them to freeze the compromised account. Financial institutions’ security protocols usually protect credit funds. You must provide extra verification to regain control of a compromised account.

  1. Freeze Your Credit and Contact the Credit Bureaus

Placing a fraud alert with the three major credit bureaus (Experian, Equifax, and TransUnion) will limit any potential impact on your credit score and credit profile. These credit bureaus also provide detection and prevention of future identity theft attempts. 

The following numbers can be used to reach them: 

  • Call Equifax at 1-800-525-6285
  • Contact Experian at 1-888-397-3742
  • Call TransUnion at 1-800-680-7289
  1. Get a Free Credit Report

You can obtain your credit report by contacting the credit bureaus, which you should review to check for any suspicious activity that could indicate further fraud. 

Notify the credit bureau if your account information changes, a new credit card application is submitted, a new card is received, or a loan request is made. 

AnnualCreditReport.com also offers free credit reports. 

Sign up for credit monitoring if you notice any suspicious activity on your credit file or accounts.

  1. Report the Scam to the FTC

File a police report with your local police department and report the fraud to the FTC. In addition to helping law enforcement track down scammers, reporting fraud helps protect others from falling victim to scams in the future. 

  • Visit this website to report fraud to the FTC: https://reportfraud.ftc.gov/
  • Contact the FTC at 1-877-ID-THEFT (1-877-438-4338) for additional assistance.

You should also report the fraud wherever your card was used. It is often possible to stop unauthorized charges from being made by fraud departments at many companies.

  1. Change Your Passwords

To prevent further unapproved use of your credit card, you should change all your passwords. A single compromised login can allow fraudsters to access multiple accounts, so you should change your passwords immediately. The use of a password manager can improve your security.

  1. Dispute Any Charges

As a result of The Fair Billing Act, consumers are protected from the financial ramifications of harmful credit card scams. Upon securing your accounts, you will be able to seek reimbursement. Chargebacks can be initiated against fraudulent credit card payments by contacting the affected companies. 

Final Thoughts

One of the best ways to protect yourself from scams is to understand how they work and how they choose their victims. If you ever get contacted by someone claiming there’s an uncommon purchase, verify the contact number and call your bank yourself instead. Checking your statements often for signs of malicious activity is also a good idea.

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