The most significant credit card scams to be aware of in 2023
Although the future is uncertain, it is clear that financial fraud can lead to major problems and financial loss. Nevertheless, you can prevent it if you are attentive. The following article will provide information about some of the most common credit card scams that may occur in 2023 and how to protect yourself from them.
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Cybercriminals have always focused on the credit card sector, and that is unlikely to change in the near future. Regrettably, the most commonly seen scams have shifted along with technological advancements, which implies that fraudsters are continuously coming up with new methods to surprise and outwit the general public. As per a 2021 identity theft survey conducted by Javelin Research, scammers have largely moved away from counterfeiting credit cards to more serious offenses like identity theft and savings account hijacking. Meanwhile, they have become increasingly focused on targeting consumers directly with scams that try to get them to divulge confidential details that enable the hacker to assume control of their identity.
We can’t predict for sure what the future holds, but it’s safe to say that financial scams cause distress and financial losses. Nevertheless, you don’t have to be a victim if you’re careful. Continue reading to learn more about some of the major credit card scams to be aware of in 2023, as well as how you can protect yourself.
Deceptive schemes that involve stealing a person’s identity information
In the past, criminals mainly concentrated on committing fraud at an institutional level, but data from Javelin Research indicates that scammers are now targeting individuals more and more. As people have been confined to their homes due to the pandemic, it has become easier for criminals to communicate with people using email, text messages, or phones.
Kathy Stokes, director of the AARP Fraud Watch Network mentioned in a 2021 press release, “Criminals take advantage of current affairs, and unfortunately, the pandemic has enabled them to come up with a lot of new strategies to utilize online.” She continued, “It is essential to teach people how to recognize the signs of fraud so that they can put a stop to it before it can occur.” Experts point out that identity fraud schemes can be avoided if one is aware of what to look out for. For example, it would be wise to be wary of any company that contacts you via phone, text, or email.
Javelin Research experts also suggest being on alert for “misspelled email addresses, requests for money out of the blue, or random messages on social media from criminals pretending to represent a financial organization.”
Fraudulent activities carried out through digital money transfer platforms are rampant these days.
In the last few years, since the beginning of the COVID-19 pandemic, the amount of individuals using digital payment services has increased significantly. As a result of this, cybercriminals and wrongdoers have adapted to this change in consumer behavior and have seen a rise in losses due to digital wallets and peer-to-peer accounts. Javelin Research stated that the increase in economic stimulus payment fraud, unemployment benefits fraud, and identity fraud scams have been particularly high.
Scams related to the reduction of interest rates on credit cards.
It is common for scammers to call customers with the false promise of reducing their credit card interest rates, claiming they have special connections with card issuers. The Federal Trade Commission (FTC) advises people to be very wary of such calls and to delete them immediately. The truth is that nobody can secure a lower interest rate for you, other than yourself. If you want a lower rate, the FTC suggests that you contact your card issuer directly.
Individuals who get tricked into paying third-party companies for a reduced interest rate never get the promised savings and have trouble getting a refund. Additionally, providing a third-party firm with your credit card number leaves you vulnerable to credit card scams like fraudulent purchases.
Attempts to obtain sensitive information through email or text messages by pretending to be a legitimate source.
Chris McHargue, a former principal financial services industry consultant for fraud at SAS, highlighted that phishing has been an ongoing issue and is still a major concern. It is usually conducted through social engineering, either by means of a call or online, with the purpose of gaining access to a card, bank account, or other personal details. It could take the form of a realistic-looking email from a company, or a caller pretending to be from a legitimate entity and trying to collect sensitive data. This data is then used for illegal activities such as e-commerce purchases with stolen credit cards or money transfers via online banking.
McHargue also mentioned that fraudsters might even open new credit cards in the name of the victim. The elderly population is especially prone to fall victim to these schemes as they may not be as familiar with the digital world.
Fraudsters exploit Social Security by utilizing deceptive tactics to acquire benefits from unsuspecting victims.
Ahren Tiller, a lawyer from The Bankruptcy Law Center, has warned about a fraudulent credit card scheme associated with Social Security benefits. According to Tiller, the scammers can either claim that they are from the Social Security Administration or try to get their credit card or bank account details. He also mentioned some warning signs such as scammers wanting you to provide personal info or your social security number straight away, using false caller IDs, and demanding payment to receive your benefits. Tiller advises to hang up right away if any of these occur.
Imposters pretending to be from a government agency are attempting to scam people.
It is important to be aware of scammers who pretend to be working for the Federal Deposit Insurance Corporation (FDIC) or some other government agency. They might even try to use the real names of government representatives for the purpose of presenting themselves as more trustworthy. According to the FDIC, the organization does not contact people without an invitation and asks for money or private details. Additionally, they state that no government body will demand payment via gift cards, wiring money, or digital currency. Furthermore, the FDIC would never solicit personal information such as bank account information, credit/debit card numbers, Social Security numbers, or passwords.
Safeguarding yourself from being a victim of credit card scams is essential. There are several precautionary measures one can take to prevent being taken advantage of. Checking account statements regularly and being aware of any suspicious activity is important. Additionally, it is wise to avoid giving your credit card information out to unfamiliar companies or websites, as well as never clicking on links from unknown sources. Furthermore, it is important to use secure websites that are protected by encryption when making online purchases.
To prevent becoming victim of credit card scams, there are numerous ways to avoid scams. Here are some helpful suggestions to keep in mind in order to avoid being taken advantage of:
If you believe you have been a victim of a scam, there are certain steps you should take.
It is fortunate that the majority of credit card scams does not have customers as the liable party. The Fair Credit Billing Act (FCBA) limits the liability of consumers to $50 in fraudulent charges, although the majority of credit cards offer $0 fraud liability plans. When you think that you may have been a target or your information has been exposed, it is important to contact the issuer of your card immediately.
A customer service representative can suspend your account or cancel your card. If this is done in a timely manner, typically within 60 days, the lender will initiate an investigation and reimburse you for any money lost. Just canceling the card may not be sufficient if your information has been compromised, so it is important to keep a close eye on your credit reports. The Consumer Financial Protection Bureau (CFPB) recommends placing a fraud alert on your credit reports with the three bureaus, as well as freezing your credit reports with Experian, Equifax, and TransUnion. If you have been the victim of a scam, be sure to report it to the FTC at ReportFraud.ftc.gov.
Safeguard yourself against fraudulence by constantly monitoring your accounts and credit score, being dubious of any incoming calls or social media messages from a person inquiring about your accounts (or pretending to be from your bank), and ensuring your confidential information (including credit card details) is secure. If you identify that your data has been breached, alert your issuer right away to shut down the account, then submit a complaint to the FTC and potentially to local law enforcement as well.
If you are a victims of Credit Card Scams, file a complaint here.
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