One morning as you’re hurrying to get ready for work, you get a call from your credit card company. The caller says there may be a fraudulent charge and asks you to verify your credit card number. You do, and the caller promises to investigate the false charges.
But when you get your bill, the false charges are there — hundreds of dollars’ worth. Do you know how the fraudsters got your credit card information? You gave it to them. Because that call you took was a phishing scam, one of the most common forms of credit card fraud.
The best way to protect yourself from these scams is to stay one step ahead of the scammers. Learn to recognize their tricks and know how to block them before they get their mitts on your money.
Credit Card Scams and Frauds to Watch Out For
Scammers are an endlessly inventive lot. They’re always coming up with new ways to commit credit card fraud and new variations on existing scams. Each time credit card issuers find ways to block one credit card scam, the fraudsters simply move on to a new one.
These are some of the most common scams and frauds involving credit cards in 2022.
1. Identity Theft
Identity theft is a type of fraud in which criminals pretend to be you. They borrow your personal information — such as your name and address, credit card information, bank information, Social Security number, or insurance info — and use it for their own purposes.
Thieves have many ways of getting your personal information. Some are high-tech, like hacking into your computer. Others are low-tech, like going through your garbage to find documents with your account numbers.
Once they have your info, they can do all kinds of things with it. For instance, they can take out new credit cards in your name but with a different address. They can then run up huge bills and never pay them. By the time you discover the crime, you could have a ruined credit rating and thousands of dollars in debt for purchases you never made.
One new form of identity theft is synthetic identity scams. A synthetic identity is a mixture of real and fake information, such as a stolen Social Security number with a false name, address, and birth date.
Criminals can use these identities to build a whole credit history for a person who doesn’t exist. Unfortunately, their behavior can affect the credit of the stolen Social Security number’s real owner.
How to Protect Yourself: To prevent identity theft, guard your personal information carefully — both online and offline. Shop only on secure sites, with “https” in the URL. Don’t enter personal information on shared computers or where others can see it. Protect your own computer with good security software.
To keep accounts safe, use strong passwords that are hard to guess, and don’t share passwords or PINs with anyone. For better protection, use two-factor authentication, which requires you to prove your identity in two ways when logging in.
To protect yourself from old-school theft, always keep an eye on your wallet or purse. Shred documents containing sensitive info rather than tossing them in the bin. And if these precautions fail and you become a victim of identity theft, report it right away to minimize the damage.
2. Phishing Scams
One way identity thieves gain access to your personal info is through phishing. They pose as a legitimate business where you have an account and get you to hand over your information.
Phishing attacks can occur via phone calls, email, or social media. Scammers have many ways to make it look like these contacts come from a real business.
They can spoof (fake) the phone numbers of real companies on your caller ID. They can copy an email from a real business, right down to the logo, and change just one letter in the email address. Or they can make a fake social media page and send messages through the platform.
Once they have you on the hook, phishers use various techniques to get your personal info. Sometimes, they get you to click a link that directs you to a fake (but real-looking) login page. When you enter your login and password, they gain access to your account.
In other cases, fraudsters call and tell you there’s some problem with your account. They ask you to “verify” details like your password, answers to security questions, account information, or Social Security number. They can use this info to help themselves to your money or open new accounts in your name.
How to Protect Yourself: The advice for protecting yourself from phishing is the same as for other forms of identity theft, plus a few more. For one, check all emails with a suspicious eye. Be especially wary of emails with grammar and spelling errors and emails where what looks like text is really an image file.
Another thing to check in any email from a business is the reply-to address. If it doesn’t exactly match the business’s name, that’s a clear sign it’s fake. Read it carefully to ensure it’s not a similar name with one character changed.
Even in emails that look legit, don’t click any links to log into an account. Instead, go directly to the company’s main account page and log in from there. If you click a phishing link by accident, update your security software and run a scan on your computer.
Similarly, if you get a phone call from a business, don’t give the caller any personal or account information. If you think the call might be genuine, hang up and call back on the company’s main number.
This form of credit card fraud has been around for ages. In the old days, it involved wait staff or sales clerks recording your credit card information and using it to make small purchases they hoped you’d overlook. Today, it typically relies on a little electronic device called a skimmer.
Thieves attach skimmers to machines that take credit or debit cards. When you put your card in, the skimmer reads and records the payment information off it. Armed with this info, the thieves can make purchases and charge them to your account.
Skimming occurs most often on card readers that are frequently used but seldom monitored, such as gas pumps, ATMs, or vending machines. It’s prevalent in popular tourist spots. Lots of people coming and going means lots of potential victims for fraud.
Adding EMV chips to credit cards has failed to foil this scam. The scammers just came up with better skimmers.
How to Protect Yourself: Sometimes, you can spot a skimmer if you examine the card reader carefully. You may see something stuck on top of or next to the card slot. Some part of the machine itself may look too big, stick out too far, or be loose or crooked.
Graphics may not line up or colors may not quite match across all parts of the machine. The keypad may look or feel too thick or have a cheap appearance. Or the machine may look off in some way you can’t define. However, some modern skimmers are almost impossible to detect.
Another way to protect yourself is to avoid inserting your card at all. Instead, use a tap-to-pay card or a mobile wallet. If you can’t do that, your best defense is to check your account statements carefully for any suspicious activity. If you see signs of fraud, report it ASAP.
4. Public Wi-Fi Scams
It’s always risky to enter personal information on your device when you’re using a Wi-Fi network. These networks aren’t secure, and hackers can intercept your info. But sometimes, the network isn’t just insecure; it’s a carefully planned scam.
Hackers set up this scam by planting a fake Wi-Fi hotspot in a public place. When you try to connect to it, the network says you must pay for access and asks for a credit card number. Then the credit card information you enter goes straight to the scammers.
In another version of this scam, the hackers don’t charge for Wi-Fi access. Instead, they let you log in and then monitor everything you do. They can record your passwords, look into your bank account, and see everything that you see online.
How to Protect Yourself: If you need to use public Wi-Fi in a store or eatery, don’t assume the network your device finds is the right one. Instead, ask an employee for the network name and password. And even then, avoid entering any sensitive information while you’re on Wi-Fi.
5. Interest Rate Reduction Scams
Anyone with credit card debt would love to pay less in interest. That’s why so many people pay attention to robocalls offering them a lower interest rate. The callers claim their company has “inside connections” with your credit card company and can negotiate a better deal for you.
If you connect to a live operator, they’ll ask for your credit card information and sometimes other personal data as well. This information is what they’re really after. On your next credit card bill, you’re likely to see charges you didn’t make but no change in your interest rate.
In a variant of this scam, the callers do contact your credit card issuer to negotiate a lower rate for you. But they charge you hundreds or thousands of dollars for the service. This version is even worse because the charges are for a service you agreed to purchase. That makes it harder to dispute them.
Moreover, the callers haven’t done anything for you that you couldn’t do yourself for free. If you want to lower your credit card interest rate, all you have to do is call the card issuer and ask. They’re just as likely to say yes to you as to a third-party company.
How to Protect Yourself: The easiest thing to do is hang up on any robocall promising you a lower interest rate. In fact, you might as well hang up on all robocalls, period. Or screen your calls with caller ID, and don’t pick up for any caller you don’t recognize.
If you want to get fewer of these phone calls, try registering your phone with Nomorobo, which is like a spam filter for phones. You can also sign up for the national Do Not Call Registry to block sales calls from legitimate businesses. It won’t stop scammers, but once you’re on the registry, you’ll know any sales call you receive is a scam and you should ignore it.
6. Charity Scams
This scam is an oldie but a perennial baddie. Fraudsters call you up seeking donations for a charity or nonprofit organization. They often do this in the wake of a natural disaster or during a crisis like the coronavirus pandemic. Older people are some of their favorite targets.
The callers use every trick in the book to get you to donate. They play on your heartstrings with long, sad stories about victims in need. But if you give them your credit card information, not a penny of your money goes to an actual charity. It just lines the pockets of the scammers.
How to Protect Yourself: This scam is tougher than most to spot. Real charities do make calls seeking donations, and being on the Do Not Call registry doesn’t block these calls. So you can’t just assume that any call from a charity is a con job.
If you get a call from what sounds like an organization you’d like to support, don’t give out your credit card number over the phone. Instead, write down the charity’s name, then hang up and research it. Sites like Charity Navigator can tell you if it’s legitimate. If it is, you can easily click through to the organization’s website to donate.
You can also check the phone number the call came from. Write it down, then enter it into an online search with quotation marks around it. The search results will tell you if other people have received scam phone calls from this number.
And if you want to donate during a crisis, don’t just respond to the first charity that calls you. Use sites like Charity Navigator and CharityWatch to find the best charities for your donation. Or seek lists of top-rated charities from organizations you trust.
7. Arrest Scams
In this government imposter scam, you get a call from someone posing as a police officer or other law enforcement officer. They say you owe money for some type of government debt, such as a fine, a ticket, or unpaid tax. Often, they use a spoofed number to make the call look legit.
The caller warns that you’ll be arrested or face other legal action if you don’t pay right now. They may say a warrant is already out for your arrest and an officer is on the way to serve it. They try to trick you into panicking so you’ll hand over your credit card number without thinking.
How to Protect Yourself: Fortunately, this scam is easy to spot. Real authorities never, ever call you to collect money over the phone. If you owe money for fines or parking tickets, they send you a letter. And they don’t threaten to arrest you on the spot.
The wording of these calls is another warning sign. Often, the first contact is a prerecorded message that doesn’t sound official at all. It may use improper grammar and make vague references to “local police” that don’t sound like the language of real law enforcement.
If you’re at all concerned that one of these calls could be legitimate, there’s an easy way to check. Just hang up and contact the real government agency directly.
8. Credit Card Farming Scams
In this one, the victims become willing participants in a scheme to rip off credit card companies. In the process, they usually end up losing money themselves.
The scammers look for people with good credit and offer them up to $10,000 to use their Social Security numbers to open new credit card accounts. Then they make tons of purchases with the new cards to get the credit card rewards. They cash in the rewards then return the items.
The callers often claim they will only use the new cards for legitimate purchases, but that’s a lie. No matter how you slice it, buying and returning things just to get the rewards is fraud. Plus, their shopping sprees can ruin your credit score. You may see your own legitimate credit card rewards frozen because of your involvement in the fraud.
Worse, sometimes the scammers don’t bother to return the goods they buy. They simply stick you with the bill. Worse still, many don’t even pay the money they promised for the use of your Social Security number. And worst of all, you risk being swept up in a criminal prosecution and going to jail.
How to Protect Yourself: This get-rich-quick scheme isn’t worth the risk. Don’t give your Social Security number to anyone to use for this kind of fraud, even if they promise a big payout. And check your credit report regularly to ensure no one is opening accounts in your name without permission.
If you’re looking to earn some extra cash quickly, there are much better ways to do it. Consider cashing in your own legitimate credit card rewards or getting a side hustle. Or save some money by cutting out costly extras like cable TV or bottled water.
9. Overcharge Scams
In this phishing variant, you get an email, phone call, or text message saying a purchase you made overcharged your credit card. To get the charges removed, you need to hand over sensitive information like your login info. Of course, that lets the scammer into your account.
In some cases, the supposed overcharge is for a product or service you’ve actually bought. Scammers often say the charge is for a common music or video streaming service like Spotify or Netflix. If you’re a user of the service, that makes the charge sound legit.
But even if you’re not, that doesn’t necessarily tip you off. It just makes you suspect a thief is using your card. That makes getting the charges removed seem all the more urgent.
How to Protect Yourself: As always, you should be suspicious of anyone who contacts you out of the blue seeking personal information. Take the same anti-phishing precautions you would with any other email or phone call. Check the address or phone number, and don’t give out any sensitive information.
If you suspect the call may be legitimate, check your credit card statement online to see if the overcharge is there. You can also call the credit card issuer to check. If you find a real overcharge, you can remove it yourself by contacting customer support.
Scammers are clever. It isn’t always possible to catch them before they get into your account. However, there are some steps you can take to minimize the damage if they do.
Start by requesting fraud alerts from your bank and credit card company. They’ll let you know immediately if they detect any suspicious activity on your account. But they can’t spot everything, so scrutinize your account statements for fraudulent charges. If you find any, ask the issuer to suspend your account and send you a new card.
Check your credit report regularly as well. Any accounts you don’t recognize or unusually high balances could be a sign of identity theft.
For extra protection, consider freezing your credit. This prevents anyone from opening new credit accounts in your name. A credit freeze costs nothing, and you can ask the credit bureaus to lift it at any time if you want to open a new account.