Credit card scams have been around almost as long as credit cards themselves. Each year, as technology advances, the methods that criminals use to scam consumers and businesses become more sophisticated.
According to the results of a 2020 study published by Javelin, identity fraud resulted in a $16.9 billion total loss in 2019 — 2.2% more than the year prior. However, a reduction in the number of victims affected by identity fraud and other credit card scams in 2019 was significantly lower than in 2018, indicating that criminals are, in fact, getting better at scamming victims out of more money than ever before.
Below, we’re taking a look at some of the most common credit card scams that affect consumers in the U.S., as well as what you should be watching for in 2022 to keep your business and your customers safe.
In 2022, it can be expected that the occurrence of account takeover fraud will continue to rise, as it has in recent months and years. This crime involves scammers obtaining passwords from unsuspecting victims and changing information, such as addresses and phone numbers so that the victim is unable to effectively change their passwords or lock the criminal out of their accounts right away. Once the account information and private data is obtained, the victim is at risk of identity theft and fraudulent transactions being processed on their accounts.
Phishing and Deceptive Calls
There are several ways criminals use phishing scams to fraudulently obtain consumer credit information. Most often, a criminal will contact their victim by email, social media, or telephone. Typically, they’ll pretend to represent a company, such as a consumer’s bank, credit card provider, internet provider, or streaming service, asking them to confirm credit card details and other private information. When these scams take place online, an email will normally look as though it comes from the service provider; however, the link leads to an unauthorized form where the consumer will input their details, ultimately providing their private credit card details to the scammer. Once this information has been shared, it can be used to make purchases with the victim’s account, open new credit accounts in their name, and in some cases, may even be sold to other fraudsters.
Interest Rate Reduction Scams
Interest rate scams happen when criminals misrepresent themselves as a company or agent that holds a special relationship with the victim’s credit card company. These criminals promise to act on behalf of their victims to secure lower interest rates. However, though, the victim ends up paying the criminal either a one-time fee or a monthly rate while never seeing the interest rate reduction they were promised. Additionally, consumers leave themselves vulnerable to fraud and identity theft by sharing credit card information with these scammers.
Sometimes fraud scams are carried out more blatantly and as new social media platforms and other ways to contact people around the world become part of our everyday life, we can expect that person-to-person scams will continue to be a threat to consumers and businesses in 2022. Typical person-to-person scams involve criminals contacting individuals, either pretending to be an estranged family member or providing a product or service for sale. They then ask the victim to send money, often via PayPal, Venmo, or CashApp, and disappear without making further contact or providing the promised product or service.
False Identity Scams
False identity scams can pose enormous threats to merchants. In these scams, criminals create fake identities using fraudulent credentials and open credit or banking accounts under that name. When this type of fraud is detected, it can negatively affect merchants when payments are reversed or credit accounts are frozen. Consumers are also at risk of being victimized in these types of scams when criminals use their social insurance numbers to open these fraudulent accounts.
Protecting Yourself and Your Business from Scammers
As we approach 2022, the scams we mentioned above continue to pose threats.
As a consumer, the best way to keep your information safe is by protecting your pin numbers and other personal data. Don’t share your details with anyone, never write them down and carry them with your cards, and most importantly, only make online purchases from verified websites via a secure network. If you’re contacted on the phone and asked to provide credit card details, hang up and call the company back at their listed phone number to confirm the call was legit.
As a business, it’s important to protect your own finances as well as the safety of your customers. Use a reliable payment gateway with built-in fraud protection tools and always make sure to store customer credit data securely.
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