As we all know, digitalization is the future. People committing payment card or credit card scams are getting sophisticated these days. This is because the chipped cards drive the scammers to card-not-present and account takeover schemes.
As a result, scammers worldwide are coming forth with new ways to scam the users and put new twists on the old scams. Hackers get the details of your account and withdraw money from it.
In the era of increasing digital transactions, the incidents of bank account fraud have increased rapidly. Unauthorized transactions are illegally taking place. It has been defined as online fraud, digital fraud, or cyber fraud.
Credit cards make online and offline purchasing convenient, both for businesses and consumers. But, unfortunately, it also opens avenues for scammers to scam the users.
However, after suffering the loss due to the scams, people tend to stay quiet as they do not know what can be done. But it is important for you to know that you can get your full money back if such incidents happen.
What are the types of credit card scams that occur?
Interest reduction scam
Interest rate reduction fraud is a scam that takes the privilege of frustrated users who want to reduce card rates and pay the remaining balance quickly. Users receive pre-recorded calls from scammers saying that they are qualified for a scheme to reduce the interest rate and pay off the balance quickly.
The call seems to be from the legit issuer, but it is from an untrustworthy and unrelated third-party scammer. The scammer charges the users without helping them reduce the interest rates.
In a bid to download data on your device or avoid paying the rental for Wi-Fi, users connect to open public Wi-Fi. But it is not a safe choice, especially when performing any credit card transaction.
The scammer sets up a Wi-Fi hotspot that needs no password. As you connect to the Wi-Fi, the scammers gain access to your information virtually.
In addition, if you perform credit card transactions over the network, they may access those details virtually and misuse them later.
Credit card skimming
We are always sure when we swipe our credit card at POS for fund transfer. But, there is a risk involved when you swipe your card for payment of goods and services. The details may be stolen.
With skimming, the scammers capture the vital details of the card during a legitimate transaction. Then, they place the skimming device over the card processing terminal and extract your card details. As the details are skimmed, the scammers use it to create fake cards and scams on your account.
How do scammers scheme to loot people?
Credit card companies are loyal to their customers, and hence they offer protection services to safeguard the card users and alert them of any fraudulent charges. The scheme may seem to be a smart option, but scammers also use such schemes to commit scams.
Scammers call the users, tell them about suspicious activity on their accounts, and verify details. In the process, they extract all vital details from the users. As they get the details from the customers, they do scams.
What to do if a person is on the verge of being scammed?
- For interest reduction scams, one can add their number to the DND registry to reduce the chances of receiving such calls from scammers. If they still receive such calls to reduce the interest rate, they should immediately hang up the call. Also, one should never share their personal, PIN, or security number and card details with anyone over the phone.
- In the case of free Wi-Fi, one must be aware of the free Wi-Fi connectivity, especially in public places. They should carefully use their personal details when using a free public Wi-Fi network.
- If it is a case of credit card skimming, one must inspect the card readers at POS and card processing terminals and cover their hands while entering the PIN. They should also update their regular card to an EMV card because EMV chip cards are secured and can be prevented from skimming. Also, one must monitor their account regularly and closely.
What to do in case of credit card scams
If one suspects a credit card fraud, he or she must know the rights and the route to report. A majority of credit card issuers offer zero fraud liability for unauthorized charges. But, users still have to learn how to end the unauthorized card. Here is what they should do:
- Contact their card issuers and report the unauthorized charges on their account.
- Change the PIN and security number immediately.
- Update their online accounts and digital wallets.
- Set up a mobile alert to know about the fraud immediately via SMS.
How to report a credit card fraud
- Before one reports the scam to the local law enforcement, they must inform the faulty charges to the card issuer. They should also support their application with an acknowledgment when filing a case with law enforcement. It will make their case strong enough.
- If someone wrongly withdraws money from a person’s bank account then they will have to complain about the incident to the bank within three days. In doing so, they will not have to bear any kind of loss.
- RBI has also said that the fraudulently withdrawn amount from the customer’s account will be returned to his bank account within 10 days on informing the bank within the stipulated time.
- If one is sure that their credit card is charged wrongly or they are the victim of card fraud, it is their right to report the scam to law enforcement. Credit card users must report the fraud or scam to Federal Trade Commission’s website.
- The website shares comprehensive details about filing identity theft and credit card scam. The details are verified and used by the agency to investigate it.
- Credit card users can follow up the case with the local law enforcement agency as suggested by the issuer. Of course, not all scams demand police involvement.
- However, it would boost the investigation of credit card scams if they follow the route. It may even aid them in recovering the stolen money into their credit card account.
How to get a refund after the scam?
People often wonder if fraud has happened then how will the money be returned? Also, if they complain after withdrawing money from the bank account, then from where will the bank return the money.
Banks take insurance policies in view of such cyber fraud. The bank will inform about the fraud directly to the insurance company and from there it will compensate for the loss by taking the insurance money. Insurance companies are also giving direct coverage to people to avoid cyber fraud.
Refunds for disputes can be obtained through the dispute process.
If you suspect that you are in fact experiencing a fraudulent transaction and you suspect fraud, inform the card issuer immediately. The issuer is likely to block your card and give you a new card that has the new number. Since the main network of cards Mastercard as well as Visa have zero responsibility policies and you won’t be responsible for fraud charges.
Visa requires that issuers credit you for unauthorised charges within 5 days after you have notified them. However credit is only provisional and they may annul the credit should they find after an investigation that you were responsible for “gross carelessness” and/or fraud. They could also find have not reported your loss. Credit can also be withheld, delayed or restricted depending on the status of your account and past history, as well as the results in the course of investigation.
The Fair Credit Billing Act also protects you from billing errors, which can include unauthorised charges. In accordance with federal law, your responsibility for fraud with your credit card is limited to $50.
In order to invoke FCBA protection, send an appeal letter to the address provided by the issuer for billing queries, along including a description of the problem. It is recommended to send it within 60 days from the date that your first statement with the fraudulent charges was mailed to you. To protect yourself, mail the letter by certified mail and request an acknowledgement of receipt to ensure you can prove receipt. The sender should resolve the issue within 90 days from receiving the letter.