What to Do if Your Credit Card Is Scammed

There are lots of reasons Americans have embraced credit cards so enthusiastically. They can help us build our credit scores so we’re more likely to get approved for loans and earn favorable interest rates. Some cards help us earn rewards, from cash back to airline miles. It also tends to be a lot more convenient to swipe your card — or, increasingly, insert it into the chip reader — than to carry around cash all the time.

For all the potential advantages of buying on credit, one significant downside is the possibility of fraud. Scammers have a field day when they’re able to get their hands on an unsuspecting cardholder’s financial information, sometimes charging thousands of dollars of merchandise before the account owner even realizes it has happened.

Think it couldn’t possibly happen to you? Instances of credit card fraud in the U.S. doubled between 2017 and 2019 to surpass 271,000 reported cases in a single year. Credit card fraud is the most prevalent form of identity theft out there. Scammers use a wide variety of tactics to steal people’s card info, or to trick cardholders into offering up their payment details.

It can be a headache when someone scams your credit card, but there are actions you can take to minimize the damage.

Here’s what to do if your credit card is scammed.

Know the Warning Signs of a Scam

The best way to protect yourself against a scam in the first place — or at least quickly recognize you may have been scammed right away — is to know the warning signs.

Scammers often call or email pretending to represent a legitimate company or cause, claiming they need your payment information. Your best line of defense is protecting your payment information in person and remotely. Look up the verified contact information for any source claiming to need your credit card info before handing it over.

Do not engage with offers you get over the phone claiming they can lower your interest rates or help you resolve your debts. Legitimate organizations — whether they’re retailers, debt relief programs, charities, etc. — will not solicit you for money, particularly using unsecure messages like phishing emails or phone calls.

Contact Your Credit Card Issuer ASAP

It’s in your best interest to get ahead of the situation if you believe you’ve been scammed. As Business Insider writes, credit cards are federally protected, so you can only be liable for up to $50 of unauthorized charges on a card that’s been reported missing or compromised. Your issuer can freeze the card and help you monitor your account to uncover suspicious activity as it crops up.

You’ll also want to place a call to your bank so it can help you keep an eye on your account and flag potential fraud.

Change Your PINs and Passwords

Cut fraudsters off from any further account access by refreshing your PINs and passwords for financial accounts.

Monitor Your Credit & Contact Credit Reporting Bureaus

There are a few options for taking control of your credit report in the aftermath of fraud. Here Experian outlines the differences between freezing your credit vs. enacting a fraud alert:

  • Credit freeze: Potential new creditors will be unable to access your history until you manually lift this freeze, making it the more drastic measure. This requires making a separate request to each of the three bureaus: Experian, Equifax and TransUnion.
  • Fraud alert: This alert tells creditors that you have fallen victim to fraud, prompting creditors to reach out and verify your identity firsthand before proceeding. You will need an official theft report to get a fraud alert put on your account. It will stay on your account for up to seven years unless you decide to remove it earlier.
  • Initial security alert: You don’t need a police report to place this type of temporary fraud alert, which demonstrates to creditors you have potentially suffered identity theft and asks them to verify your identity. It stays on your report for as long as a year, but you can cancel earlier.

Credit card scams can happen to the best of us, but you’ll gain an advantage by following these procedures if your payment information has been compromised.

Posted in: Personal Finance

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