Credit card scams and fraud – how to protect yourself

Learn how to protect yourself from credit card scams and how to report telephone scam artists.

Would you like to lower your sky-high credit card interest rates? How do you know if the unsolicited caller who says he’s affiliated with your credit card company and can reduce your interest rate and save you $2,500 is legitimate? The service only costs $695 up front, and you must fill out a “financial profile form” with details about your debts, including balances, credit limits, interest rates, and customer-service numbers, plus your name, address, and Social Security number. There is nothing wrong with that – right?

Consumer Reports says the full extent of the “let us reduce your credit card bill service” typically involves a conference call with the thief, victim, and creditors, during which the thief asks for a rate reduction and the creditor usually refuses. Consumers, of course, can do this on their own—free. One such operation, Select Personnel Management, a Canadian company, and eight associated companies and defendants were ordered by a U.S. District Court in Illinois in 2009 to pay more than $7.8 million and stop telemarketing after the Federal Trade Commission (FTC) said they cheated more than 12,000 consumers.

Wikipedia defines credit card fraud as theft and fraud committed using a credit card or any similar payment mechanism. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud can also be connected to identity theft.

Protect yourself: don’t give personal information to anyone who initiates contact with you. Visit the National Do Not Call Registry website or call 888-382-1222 to register your phone numbers on the National Do Not Call Registry. If a caller claims to be from your bank, tell him/her you’ll call back (to the number on your bank statement) before sharing your Social Security, account numbers, address or date of birth.

TheFederal Trade Commission (FTC) cautions consumers to avoid doing business with callers who claim:

  • You’re liable for more than $50 in unauthorized charges on your credit card account
  • You need credit card loss protection because computer hackers can access your credit card number and charge thousands of dollars to your account
  • A computer bug could make it easy for thieves to place unauthorized charges on your credit card account
  • They’re from "the security department" and want to activate the protection feature on your credit card

Report telephone scam artists to the FTC and to Michigan’s Attorney General. When you report phone fraud to the FTC, your complaint is entered into a secure database that is available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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