5 Common Credit Card Scams in 2023
Credit card scams are fraudulent activities that involve unauthorized use of your credit card information. Credit card scammers are more sophisticated than ever – if you have a credit card, bank account, email, or smartphone, it’s essential that you’re aware of these scams so you can learn how to protect yourself from becoming a victim.
Read on as we discuss five common credit card scams and share credit card fraud examples like phishing, skimming, fake payment scams, card-not-present (CNP) fraud, and identity theft. They say knowledge is power, and that statement couldn’t be truer than when we’re talking about protecting your financial future.
1. Phishing Scams
Phishing is the act of attempting to acquire sensitive information such as usernames, passwords, or credit card details by masquerading as a trustworthy entity in an electronic communication.
This type of credit card scamming usually involves sending emails or texts that appear to come from legitimate sources like banks or financial institutions. In reality, they contain malicious links or attachments designed to steal your personal data.
To avoid falling victim to phishing attacks:
- Be cautious when clicking on links within emails or in texts.
- Hover over the link first in an email – WITHOUT CLICKING IT – and check where the link would direct. Is it a legitimate website?
- Check the email addresses – are they from a real business or institution that the information is supposedly coming from?
- Avoid opening unsolicited email attachments or texts.
- Contact your financial institution directly if you receive suspicious messages asking for personal information.
2. Skimming Scams
Skimming, another prevalent form of credit card fraud, involves stealing magnetic stripe data from cards using ” skimmers ” on ATMs or point-of-sale terminals at businesses such as gas stations and restaurants. Criminals then create counterfeit cards with this stolen data, which they can use for unauthorized transactions.
To protect yourself against skimming:
- Inspect ATMs before inserting your card, and look for any signs of tampering, like loose parts or unfamiliar attachments.
- Use ATMs in well-lit, busy areas to minimize the risk of encountering a compromised machine.
- Cover your hand when entering your PIN to prevent hidden cameras from capturing it.
3. Fake Payment Scams
Fake payment scams involve criminals posing as sellers or service providers and tricking victims into paying for non-existent goods or services. Scammers may employ online marketplaces, social media platforms, or even telephone calls to perpetrate fraud.
To avoid fake payment scams:
- Verify the legitimacy of sellers by checking their reviews and ratings on trusted websites like Better Business Bureau (BBB) before making any transactions.
- Avoid sending money via wire transfer services – use secure payment methods and open credit cards that offer fraud protection features.
4. Card-Not-Present Scams
Card-not-present scams are one of the types of credit card fraud that can occur when a physical credit card is not required for a transaction. These scams typically happen when buying items electronically or by phone. The scammer gains access to your credit card information, like the credit card number and expiration date, and uses it to make unauthorized transactions.
To avoid card-not-present scams:
- Secure your online transactions by creating strong passwords for all online accounts and updating them regularly.
- Use multi-factor authentication when feasible and avoid Wi-Fi networks for making purchases or accessing financial balance data.
- Limit sharing any personal information on social media to reduce the risk of falling victim to these scams.
- Closely monitor credit card statements to detect fraudulent charges early and review your accounts frequently and report any suspicious activity immediately.
- Opt for mobile wallets, which offer an additional layer of security by not sharing your actual credit card number with merchants.
- Never provide sensitive personal information like social security numbers and credit card details over the phone or through email. Verify the authenticity of any requests before providing such information.
5. Identity Theft Scams
Identity theft scams involve criminals who use your personal data, like your Social Security number or credit card information, for their gain through unauthorized transactions and opening new accounts in your name. These schemes can cause significant financial harm and damage your credit rating.
To avoid identity theft scams:
- Beware of unsolicited emails requesting personal information; never click on suspicious links or download attachments from unknown sources.
- Create strong passwords that combine letters (upper-case & lower-case), numbers and special characters; update them regularly.
- Review bank statements, credit card transactions & credit reports for any unauthorized activity or errors.
- Promptly collect incoming mail from your mailbox and shred sensitive documents before discarding them. Consider opting for electronic delivery of financial statements.
How to Protect Against Credit Card Scams
Take steps to proactively secure your finances to reduce the risk of credit card scams. Here are some practical ways to safeguard your finances:
Free Credit Monitoring – HFS Federal Credit Union offers free credit monitoring services that help you keep track of any suspicious activity on your account. Regularly reviewing your credit report enables you to promptly identify unauthorized transactions or inquiries.
Routine checks – Regularly check your bank statements and online accounts for unusual charges or discrepancies. This allows you to spot potential fraud early and take necessary action before it escalates.
Set Up Alerts – Contact HFS Federal Credit Union to set up alerts for specific transaction types, amounts, or locations that may indicate fraudulent activity on your account.
Multi-Factor Authentication – MFA adds an extra layer of protection by requiring additional verification methods beyond just a password when accessing sensitive information online. For example, you might get a text verifying if you are the one logging into an account.
Avoid Public WiFi – Avoid using public Wi-Fi networks when conducting financial transactions. They are often insecure and susceptible to hacking attempts. Instead, use secure connections like private home networks or VPNs while managing personal finances online.
Don’t Share Personal or Sensitive Information – Be wary of divulging private data, like Social Security numbers, credit card info, or account passwords. Credit card scammer websites may use your personal data to steal your identity and gain access without authorization to your accounts.
By being aware of the common tactics scammers use, such as phishing, skimming, fake payment scams, card-not-present scams, and identity theft scams, you can take proactive steps to safeguard your financial information.
To further enhance your security measures against threats:
- Sign up for free credit monitoring services to monitor all your credit card use.
- Perform routine checks on your account statements and report any suspicious activity immediately.
- Set up alerts for unusual transactions or login attempts.
- Enable multi-factor authentication whenever possible.
- Avoid using public Wi-Fi networks when accessing sensitive financial information online.
Contact us today to learn more about protecting your financial future.