Now more than ever before, life happens online. From social media to online shopping, technology is ever-present in pretty much every person’s day-to-day actions. If you thought swiping your credit card at the store was easy, now you don’t even need a physical credit card to make a payment — all the info you need to make a purchase can be saved right on your smartphone. But as easy as it is to make a purchase online, manage your finances through apps, or even transfer money to a friend, technology has also made it easier for credit card scammers to access your information. With every new way to pay comes a new way to scam, and it’s vital to stay on top of all the worst new ways credit card scams can take advantage of unsuspecting users.
How do you protect yourself against credit card scams?
Fraud reports to the Federal Trade Commission (FTC) saw a 30% increase from 2021 to 2022, totaling a whopping $8.8 billion in losses for Americans. Fraud from credit card scams can impact consumers and businesses alike, leading to identity theft, unauthorized transactions, and even takeovers of your entire account.
Do you know that gut feeling you get when something around you goes wrong? That same feeling can be a first-line defense against scammers. “For credit card holders looking to armor up against scams, my top advice is to be vigilant and trust your instincts,” says Taylor Kovar, a Certified Financial Planner and CEO at TheMoneyCouple.com and Kovar Wealth Management. “Like a referee in a high-stakes game, you’ve got to keep your eyes on the ball at all times. If a phone call, email, or transaction feels odd, it probably is.”
Above and beyond following your instincts about fishy transactions, there are some tangible things you can do to ensure you’re protected against credit card scams — even as new scams continue to surface. “Monitor your account regularly, be careful about where and how you share your card details, and remember, your bank will never ask for your PIN or full password,” Kovar says. “Reporting any suspicious activity to your bank immediately helps ensure your financial safety.”
Another key factor in protecting yourself is to stay aware of the latest schemes being used to target credit card holders. With that in mind, let’s look at some of the most common new credit card scams happening right now.
Is the number of incidents of credit card fraud reported in 2021 by Americans ages 30 to 39.
Though the concept is not new, phishing scams are still one of the most common credit card scams out there. Phishing scams targeting credit cards involve scammers posing as legitimate entities like your banks or credit card company. They’ll often use deceptive tactics like email or website impersonation to trick you into sharing their credit card details, including your card numbers, CVV codes, or login credentials.
Once they have your credit card information, they can make unauthorized transactions or even steal your identity completely to open new credit card accounts, depending on what details they have. To protect yourself, Raymond Quisumbing, MBA, a Registered Financial Planner at BizReport, has this advice: “Never disclose to anyone the card number, the last three digits at the back of your credit card (CVV/CVC), and the expiration date. These are the basic pieces of information that scammers need to be able to transact.”
The average American has between three to four credit cards, and juggling information for that many or more cards can make it hard to keep things secure. It can sometimes be helpful to clear out your credit card debt in order to decrease the number of cards you have to keep up with. Check out Credello’s credit card debt consolidation options that can help you consolidate credit card debt to pay it down quickly.
Peer-to-peer payment apps scams
The use of peer-to-peer payment apps like Venmo, CashApp, and Zelle can leave credit card users susceptible to scammers. Given the recent uptick in the use of these apps, fraudsters have taken to impersonating bank officials attempting to verify transactions.
A report by Marketplace in 2022 noted that consumers had lost approximately $10 billion to peer-to-peer payment app scams, according to an estimate by Lisa Ellis, a partner and senior research analyst at MoffettNathanson, a division of SVB Securities, with clients who own peer-to-peer apps. Though these apps are continually evolving and increasing security, it’s important to do your own due diligence when making peer-to-peer transactions or speaking with individuals regarding your account use.
Social media scams
Because more people are now aware of how scam phone calls and emails work, fraudsters have turned to social media messaging and advertisements to implement their credit card scam schemes. The FTC reported that the highest overall reported losses from scams in 2022 came from social media, totaling $1.2 billion.
Scammers may even build fake websites complete with matching social media accounts to attempt to appear more legitimate to consumers. “The most common credit card scam tactics that I see often involve online transactions. Scammers may pose as fake websites and ask for credit card information to process an order,” Quisumbing explains. “Once they get all the details, they may transact numerous small transactions or several large ones.”
If something seems too good to be true, it probably is, right? When it comes to credit card reward scams, fraudsters may attempt to sell you the benefits of using a specific credit card for a transaction to obtain your info. They might call, text, or email with an offer of cash-back rewards or even a free trip in exchange for your personal information, including credit card numbers, security codes, and account details, under the guise of verifying eligibility for the rewards.
To protect against this new credit card scam, you should always exercise caution and verify the legitimacy of any credit card rewards program before sharing sensitive information.
Overcharge scams happen when a merchant deliberately charges your credit card an amount higher than the advertised or agreed-upon price. By secretly inflating prices, adding unauthorized fees, or charging for goods or services not received, scammers can pocket the excess amount charged.
These scammers are banking on you not immediately noticing the fraudulent charges so that they can profit from the scheme for as long as you go without seeing the discrepancy. Keeping an eye on your account statements and balances and disputing unrecognized transactions or overcharges is crucial in protecting against this scam.
With the rise of internet-based fundraising and crowdsourcing for people in need, it’s become easier for credit card scammers to pose as a charity to obtain credit card information. Using platforms like GoFundMe or Kickstarter, scammers can create fake organizations or false needs (like a medical emergency or house fire) to trick unsuspecting credit card users into donating or handing over their personal information. Even though these websites do have protections in place to ward off fraudsters, charity scams can still happen.
According to the FTC, charity scammers will often use natural disasters or emergencies as a cover for their scams. If a charity asks for a donation through a gift card, wire transfer, cash, or virtual currency, chances are it’s a scam. Do your research and vet any organization asking for donations thoroughly before giving.
Though skimming scams are not new, they’re certainly a credit card scam to be aware of when you’re out and about. The Federal Bureau of Investigation (FBI) estimates that skimming tactics account for about $1 billion in losses for Americans annually. According to Kovar, skimming happens when “your card details are copied at places like ATMs or restaurants.” Keeping an eye on your statements is one way to help protect yourself against this common tactic.
Another way to prevent skimming scams from working properly is by enabling two-factor authorization on your credit cards. “For any transaction to push through, one would need to input two security keys, one to your registered mobile phone, and the other to your registered e-mail address,” explains Quisumbing. Not only can this step keep you protected from skimming, but it can also enhance your security when using a credit card online.
Security breach scams
When you use your credit card to make purchases, your information can be susceptible to security breaches of the company where you’ve used your card. Data breaches impacted 422.1 million people in 2022, according to the Identity Theft Resource Center’s Annual Report, and it can happen even with strong cybersecurity in place. For example, if your card is connected to your Amazon account and Amazon’s security database is breached by scammers, your credit card information could be at risk.
Another way this type of credit card scam can work is similar to phishing scams. For example, you could receive an email or a text that looks like it’s from a known entity like PayPal, asking you to confirm account details or click a link. These messages often look incredibly legitimate, so it’s important to understand the methods by which a company will contact you and always log into their official site with a strong password to verify any information.
Government imposter scams
Credit card scammers will often pose as a government or law enforcement agency when attempting to obtain your protected information. In fact, imposter scams were the top-reported scam tactic in 2022, per the FTC. Calls and emails that appear to be from the Social Security Administration, Internal Revenue Service, or even local law enforcement can often prompt individuals to offer up their protected information.
It can be intimidating and scary to receive a call related to your finances and the government. But, government agencies are also aware that these scams are on the rise and should be fine with you verifying their identity to stay safe.
In an increasingly digital world, credit card scams have become more prevalent and sophisticated, posing a significant threat to credit card holders. With the rise of online transactions and the use of payment apps, scammers continue to find new avenues to exploit unsuspecting users. To best protect yourself against credit card scams new and old, trust your instincts, monitor your accounts regularly, be cautious about sharing sensitive information, and promptly report any suspicious activity to your bank. By staying vigilant and informed about the latest credit card scams, you can safeguard your credit and stay on top of your finances.