5 Credit Card Scams to Watch Out for in 2019
Back in 1789, when Benjamin Franklin famously quipped how “in this world nothing can be said to be certain, except death and taxes,” there were obviously no financial products similar to today’s credit cards to consider. Had there been, you can be certain that Benny would have been quick to add “credit card fraud” to his list of absolutes.
No matter how sophisticated credit card issuers’ security systems become, the scammers are never very far behind. When banks do update their security measures—for example: incorporating chip-and-PIN technology to replace the older, easier to penetrate magnetic strip cards—there may be some lag, but soon enough the criminals develop new strategies to effectively thwart them.
And with respect to those much-hyped, ultra-secure, chip-and-PIN cards, it didn’t take more than a couple months for the criminal hacker community to get around the heightened security through a process christened “shimming.” While for their less tech-savvy fraudster colleagues, it just meant diverting more focus back to some of the older, tried-and-true frauds, like phishing.
With cybercrime in Canada steadily rising over the past two years, it’s clear Canadians still need to be hypervigilant about protecting their cards and personal information. We’ve identified some of the more common credit card scams that Canadians should watch out for in the coming year, along with information on how best to guard ourselves from falling victim to them.
The Scam: The scammer sends out an email posing as a representative of the victim’s credit card company, informing them that they need to update their personal information before they can receive their new debit or credit card. Victims might also be told that their current card will be rendered invalid within a few days time. Replying to the email with the requested personal information, or clicking on an enclosed link and entering the information there, is all the scammer needs to steal your identity.
What You Need to Know/Do: No credit card issuer will ever ask you to update your information via email. Also, new cards are usually sent to customers automatically, with no action required on your part outside of activating them. As a crucially important rule of thumb, never click on any link embedded in an email message unless you’re 100% certain that the sender is legitimate.
The Scam: This scam seems particularly nefarious if only because it’s so invasive and potentially all encompassing. Basically, criminals set up a free, passwordless Wifi hotspot in a popular location and monitor all the activity on the network. Log into your bank account over that unprotected wireless connection and all your information (and money) is now in the hands of criminals. Sometimes thieves can even access your browser history, or they can decrypt information sent through secure websites.
What You Need to Know/Do: The simplest thing you can do to protect yourself is to be discerning about your online activities when using any free public network. This means no banking or credit card purchases. Even logging into your email account is dangerous.
Promotional Interest Rate
The Scam: This racket begins with an automated call from someone claiming to represent your bank or credit card issuer. The automated call will offer you an incredible opportunity to dramatically reduce your interest rate and pay off your balance sooner. All you need to do is pay a one-time fee and enrol in the program to qualify. The victim promptly pays the fee on his or her card and… well, that’s all there is to it. Literally. Your card is charged for the fraudulent ‘promotion’, except a couple months later when your new low rate is set to kick in, it doesn’t. And never does.
What You Need to Know/Do: Beware of automated calls in general, and even more so when they’re offering something that sounds just a little too good to be true. If you’re unsure about the legitimacy of the call but don’t want to risk maybe losing out on a good bargain (Canadian banks do occasionally offer them), hang up as soon as you’ve heard the entire recorded spiel and contact your credit card issuer to verify if there’s any truth to it. And don’t forget the general rule of thumb with incoming calls: Never provide banking or personal information to anyone over the phone unless it’s a call you initiated yourself, to a number you know categorically to be legitimate.
The Scam: Somebody claiming to be an investigator with your card issuer’s fraud department calls to warn you that they’ve spotted suspicious activity on your account and just need a bit of information to verify if it’s truly been compromised or not. The perpetrators might already have some of your information and may only need one more piece of the puzzle in order to steal access to your credit card — and potentially your identity as well, taking your entire life savings along with it.
What You Need to Know/Do: This one can be a little trickier because calls from a bank’s fraud department can sometimes be legitimate, however unlikely. The way to protect yourself is to politely hang up and call the number on the back of your card to verify if what you’ve been told is true. You’ll likely learn that the call was a phishing attempt, in which case you’ll need to closely monitor your account over the subsequent weeks to make sure there are no unrecognized purchases charged to it. Sometimes criminals already have enough information to use your card for some fraudulent purchases, but not others. Providing them with just one extra bit of information, your security code for example, might be all they need to really take you to the cleaners.
The Front Desk
The Scam: Your hotel room’s phone rings, ideally at an hour when you’re either asleep or not fully awake yet, i.e. not at your sharpest. The front desk has somehow lost your credit card information (usually through a computer error) and needs you to provide it to them again. Of course, it’s not the front desk calling, but rather a grifter looking to rip you off.
What You Need to Know/Do: Never provide personal information on any phone call you didn’t initiate yourself. Hang up, call the front desk, and ask if there have been any problems with your card. If the front desk indicates that there indeed is an issue with your card, err on the side of caution and don’t provide any info to them over the phone. Tell them you’ll come by the front desk a little later with the requested information.