We can lower your rate!
The basic premise: For an upfront charge, sometimes
as much as $500, the caller promises a deal, says Susan Choe, section chief
with the Ohio Attorney General's Office. And you can simply put the fee on your
card.
They can deliver, they say, because they have the
right contacts or a special relationship with the card issuer. They may even claim to
be from "card member services," "card services" or "cardholder services," she says.
Consumers who agree are charged the upfront fee,
but those making the promises "failed to deliver," she says. The
state is putting the word out to consumers: "Please don't pay someone hundreds
of dollars for something you can do yourself," says Choe.
In some
cases, it's a ruse to collect your financial information. In others, it may be
an actual business that's simply charging a huge fee for something you could do
yourself, she says.
Signs the call is not what you
think: If this
is truly a division of the issuer, you won't have to pay a fee to get a lower
rate. If this is a legitimate outside company, it can't do anything you can't
already do for free, says Choe -- such as call up and ask for a lower rate. And
beware if the word "guarantee" gets thrown out, she says. No one can
guarantee you a lower rate. Another
clue: The first contact may come through a robo-call, which is illegal.
The fake freeze
This one
was especially heartbreaking when criminals targeted people receiving
disability benefits that were loaded onto cards, says Choe. "The accounts
were drained."
How to avoid it: Never use phone numbers or
contact information that someone gives you in an e-mail, text or phone call.
Instead, look up the card contact information yourself (from a monthly
statement, on the back of the card, etc.) Then call and find out what's really
going on.
The three-digit con
The real
purpose of the call: to get the three-digit security number on the back of the
card. "That's what they're really after," says Steven Weisman, law
professor at Bentley University and author of "The Truth About Avoiding
Scams."
They may
even have some of your data already. Which means they've either bought some of
your information online, gone dumpster diving or picked up one of your old
receipts.
The clue to a con: "When they're asking you
for information, that's always a bad sign," says Weisman.
Free games! Free music!
Free porn!
But that
download could come with a keystroke logger. That's a malicious little piece of
software that will note your private passwords and other information (such as card
numbers), and send it back to the scam artist, says Weisman.
How to
protect yourself: Keep your security program updated. "It has to be done
automatically and regularly," he says.
Just
as in the real world, avoid sketchy cyberlocations. "There's not much of a
fear of this with legitimate websites,"
he says. "Downloading
free music or free games is like waving a red flag," says Weisman.
Come to our spoof site!
You get
an e-mail from your bank, PayPal or your favorite store. There's a problem with
your account. There's been a security breach. Or your order's ready. Whatever
it is, just click this link to get more information or pay for your order.
It's a
scam. And so is the site on the other end of that link.
Some of
the e-mails look real, says Weisman, who recently received one from a bank. "If
I had an account, I might have actually fallen for it," he says.
How to
protect yourself: Hit delete. If it's a vendor from a place where you have an
account or are expecting an order, go to the real site yourself, not through a link.
Bad credit? No income?
No problem!
This credit card
premise sounds great: $0 fees, 0 percent APR , and a hefty credit limit. And if
you've had some financial problems it doesn't even matter.
Chances
are it's one of a couple of scams, says Nadine Samter, an attorney with the
Federal Trade Commission. The catch is buried in the fine print, if it's
revealed at all, she says.
In one
recent case that her office prosecuted, the card was good only for items in the
company's catalog, which were marked up well beyond the norm, Samter says. And
a "cash advance" feature turned out to be an application for a payday
loan, she says.
Even
worse: The company deducted hundreds in fees (almost $400 in some cases),
directly from consumers' bank accounts, says Samter. Since consumers weren't
expecting the bank drafts, many didn't have enough money in their accounts to
cover them. So they were also hit with insufficient funds charges from their
banks. End result: a pile of debt and a card they never used.
Bad credit? Part 2
In
another twist on the "bad credit, no problem" script, the card is
actually a secured credit card. Unlike legitimate versions, the fact that it's
secured is buried in the promotional fine print or omitted, and these scam
versions sport hundreds of dollars in fees -- rendering them nearly maxed out
from the beginning.
Consumers
encounter these "bad credit" card schemes in myriad ways. The
companies may buy lists of the recently bankrupt and call or send an e-mail or
snail mail. Or they may place an ad and wait for the phone to ring.
How to
protect yourself: The old saw is true, says Samter. "If it looks too good
to be true, it probably is." And if your credit or finances are shaky, ask
yourself why an issuer would give you a card, she says.
Watch
out for high-pressure sales tactics, Samter says. "That usually means it's
not legitimate," she says.
In
addition, the Credit CARD Act of 2009 limits upfront fees on new cards to 25 percent (or less)
of the credit line in the first year. And regulators are moving to include
those initial "processing fees" in the 25 percent cap.
Tag-alongs
You're
shopping online. Suddenly, you're presented with a free trial offer for another
product or service. Hey, why not?
And "before
you know it, they're debiting your bank account every month," Samter says.
Often
called "pass-throughs" or "affiliate marketing," these are
third-party vendors who are piggybacking on the original transaction. It can be
a scam or a real business. But "it's a really bad practice" for
consumers, she says.
Depending
on the company, the charges could be just a few dollars. But in some cases, it's
$50 to $100 a month or more.
In some
instances, consumers accepted the offers but didn't realize they had to
actively cancel if they didn't want to be charged after the trial period ended.
In other cases, regulators suspect that the consumers didn't opt in but the
charges were simply billed to their accounts, says Samter.
To
protect yourself: Say no to those free trial offers. And read your credit card statements
every month. If you find charges you and your family don't recognize, report
them to your card company.
Skimmer scammers
You're
ready to pop your card into the reader at the ATM or gas pump. But something
looks a little "off."
Listen
to your intuition, says Gordon Leek, a retired Calgary police detective and the
author of "Trust Me: Frauds, Schemes and Scams and How to Avoid Them."
Criminals
will install overlays that cover the real machinery, says Leek. "And most
consumers don't realize they are putting their cards into these fake overlays."
To prevent problems: Don't be
afraid to get physical. "Grab the thing and shake it a bit," he says.
While crooks may do a good job cosmetically, the fakes often aren't that
durable.
Since
crooks also need your PIN numbers , there may be a spotter with a camera, or a
camera planted nearby. So be on the lookout for items that don't belong or aren't
usually there (such as a trash can), or someone hanging around.
