Credit
Fraud and Credit Scams – Don’t Become A Victim!
FACT #1
Credit fraud and scams
have been around as long as there has been credit
FACT #2
Anyone is vulnerable, but
certain people are more vulnerable
FACT #3
You don’t have to be one
of them!
Credit fraud is designed to steal money from your bank account or credit
cards. Part of that may or may not be identity theft but
often they go hand in hand. Credit scam artists appear honest and trusting
thus getting you to drop your guard. Once they have done that they very
smoothly move in for the kill. Here are some of the major scams currently
going around:
Email
Scams Offering Pre-Approval On A Loan
Here’s one that I have been receiving all week in my inbox:
|
Leslie,
After Checking your new
records, you've been overpaying by many points. Our office can help you
lower that now
http://www.randomemailaccount.com
This is not a pre acceptance,
you have already been confirmed.
Best Respects,
Kelly Bartlett |
I have not applied for any loans recently,
and I use the credit protection service, LifeLock
so I know that nobody has pulled my credit.
This
is an obvious credit fraud scam because I've received about 12 of them over
the past week - all from different emails, but always the same message.
But some people desperate enough might check them out and get suckered.
Here’s
How To Know If An Email Is Credit Fraud
Red
Flag #1 –
Offering a large loan with no credit check.
Red
Flag #2 – Once
you respond they will offer to transfer the money directly into your bank
account
Red
Flag #3 – They
tell you that they need a certain amount of money by Western Union wired
that day, promising you the loan to your bank account by the next day.
Red
Flag #4 – Some
of these lenders have 900 numbers and you can get charged $15 to $25 for the
call, which they don’t tell you about at the time of the call!
File Segregation
This
is a type of credit fraud scam that could get you fined or sentenced to
jail time if you use it. It is an illegal scheme used by some
credit-repair companies to encourage consumers with bad credit to obtain new
taxpayer identification or employer identification numbers from the IRS and
use them to hide their true credit identities from creditors.
For a
fee, these companies promise advice on how to go about segregating your
credit files. File segregation is illegal and consumers who employ it are
committing a felony. Let me assure you now, 1-800BadCredit offers credit
repair services but they are legitimate credit attorneys
and
consultants that you can
trust.
Loan
Flipping
While
not technically "credit fraud" because your credit or identity is not stolen.
This is a financial scam that exploitative lenders may use to take advantage
of the borrower by repeatedly talking the borrower into refinancing a loan.
These
loans contain lenders fees, so every time you “flip” the loan they collect a
huge fee (built into the loan). Which in turn increases your overall debt and
payments. Many people have lost their home because of schemes like this
because the excessive fees added to the loan increased their payments beyond
what they could afford.
Here’s
An Old Credit Fraud Scam That Is Coming Back Around
It
works like this: Person calling says, “This is Carl Patterson and I'm calling
from the Security and Fraud department at MasterCard. My Badge number is 53928. Your
card has been flagged for an unusual purchase pattern, and I'm calling to
verify. This would be on your MasterCard card issued by XYZ Bank. Did you purchase
an Anti-Telemarketing Device for $497.99 from a marketing company based in
Arizona?
When
you say “No”. The caller continues with, “Then we will be issuing a credit to
your account. This is a company we have been watching and the charges range
from $297 to $497, just under the $500 purchase pattern that flags most cards.
Before your next statement, the credit will be sent to (gives you your
address), is that correct?”
You
say, “Yes”. The caller continues... “I will be starting a fraud investigation.
If you have any questions, you should call the 800 number listed on your card
1-800-MASTERCARD and ask for Security. You will need to refer to this Control #.”
Then he gives you a 6 digit number.
The
caller then says he “needs to verify you are in possession of your card. Turn
the card over. There are 7 numbers; the first 4 are 1234(whatever) the next 3
are the security numbers that verify you are in possession of the card. These
are the numbers you use to make internet purchases to prove you have the card.
Read me the 3 numbers.” Then he says “That is correct. I just needed to verify
that the card has not been lost or stolen, and that you still have your card.
Do you have any other questions? Don't hesitate to call back if you do.”
Now
that they have obtained your 3 digit code on the back they can make charges to
your card without your authorization! So on the next statement you’ll see the
$497 on it, but you think, “well, he did say they were reversing it.” So you
wait another month and your statement comes, and instead of a reversal there’s
a second charge for $497 and maybe even a third one! By this time you’ll have
contacted your credit card company and shut down your card, but good luck
getting the money back! The credit card company may fight you on it, because
the original charge is now over 30 days old.
Now
you may wonder how they got your credit card number. Most likely from some
statement you threw away. Every day there are people who make a nice living
just going through people’s trash. Make sure you shred all documents with
credit card numbers or your social security number on it or you could become
the next victim of credit fraud!
Guarding Against Credit
Fraud
Do
-
Sign your cards as soon as they arrive
-
Carry your cards separately from your wallet, in a zippered compartment, a
business card holder, or another small pouch
-
Keep a record of your account numbers, their expiration dates, and the phone
number and address of each company in a secure place
-
Keep an eye on your card during the transaction, and get it back as quickly
as possible
-
Write “Void” on incorrect receipts or shred them
-
Destroy carbons
-
Save receipts to compare with billing statements
-
Report any questionable charges promptly and in writing to the card issuer
-
Notify card companies in advance of a change in address
-
If you
think you're a victim of credit fraud contact a
credit attorney
immediately!
Don't:
-
Lend your cards to anyone
-
Leave cards or receipts lying around
-
Sign a blank receipt. When you sign a receipt, draw a line through any blank
spaces above the total. For instance, when you buy fast food often the
receipt contains a line for a “tip.” Don’t leave this line blank! Put $0 in it and write the total
below, as if you were writing a restaurant receipt. This way someone can’t
“fill in” the tip column for you and collect some extra cash in their
pocket!
-
Give out your account number over the phone unless you're making the call to
a company you know is reputable
Reporting Losses and
Credit Fraud
If you lose your credit or
charge cards, or if you realize they've been lost or stolen, immediately call
the issuers before you become a victim of credit fraud and have to go through
the nightmare of fixing your credit! Many companies have toll-free numbers and 24-hour service to
deal with such emergencies. Once you report the loss or theft, you
have no further responsibility for unauthorized charges. In any event, your
maximum liability under federal law is $50 per card.
If you suspect credit fraud, you
may be asked to sign a statement under oath that you did not make the
purchases in question.
Portions of this article were taken from:
http://www.ftc.gov/bcp/conline/pubs/credit/cards.shtm
http://urbanlegends.about.com/library/bl_credit_card_fraud.htm
