SELF-DEFENSE AGAINST CREDIT CARD FRAUD
Michigan Credit Union League - Your Money Matters
The phone rings while you're eating dinner. When you answer, a cheerful voice says, "Congratulations, Mr. Smith! I'm calling form the Acme Travel Bureau and you've just won a week-long trip to Hawaii."
As you dance around with glee, the voice says, "All of your trip expenses are covered except for a $18 federal airport tax which you can pay with any major credit card. If you'll just read me your credit card number and expiration date, I'll put your tickets in the mail right away." As visions of beautiful beaches and warm breezes float before your eyes, you rattle off the numbers.
You've just been ripped off. While you celebrate your good fortune, your caller is quickly using your credit card number to run up hundreds or thousands of dollars on your credit card. Your tickets to Hawaii never arrive. All you get out of the deal is a huge credit card bill with lots of unauthorized charges.
The above scenario, provided by CreditComm Services, is just one story among the thousands that racked up an amazing $864 million in credit card fraud in 1992. No matter what the variation, the intent is always the same: The thief wants you to tell him or her your credit card number. And if you comply, the result is always the same: huge bills on your credit card.
How do you protect yourself? Foremost, never give your credit card number to someone who calls you on the phone. The caller may claim to be from a legitimate, nationally recognized company; may claim to be a police officer investigating credit card fraud; or may claim to be calling from one of the major credit card companies to resolve a problem with your account. Your caller may be totally charming or sound official, but there is no way for you to know if he really is who he says he is. A legitimate caller, such as a police officer or investigator for a credit card company, will never ask you to recite your credit card number over the phone.
The following is a short list of some other common credit card scams, courtesy of CreditComm Services.
* You receive a postcard announcing that because of your excellent credit record, you qualify for a low-interest credit card. The postcard lists a toll-free number to call for more information. When you call, a salesman tries to pressure you into paying a one-time fee of up to several hundred dollars for the low-rate card. If you sign up, what you actually receive is a small list of banks that offer low-rate credit cards. These same lists are available for free on the Internet.
* A telephone solicitor offers you a low-interest credit card as part of a "package of consumer financial services" that includes discounts on long-distance telephone services, travel, hotel accommodations, retail purchases and more. The "package" costs anywhere from $200 on up, and instead of a low-rate credit card, you get a list of banks that offer low-rate cards. The promised discounts are also fraudulent or require expensive purchases for you to qualify.
* You receive a letter claiming that you've won a free or bargain-priced trip. When you call to claim the trip, you're told that you have to join a travel club to qualify. You provide your credit card number to pay the club fee, but you never receive the free or low-cost trip. Or, it has so many restrictions and hidden charges that you're unable to use it.
Although there is no sure-fire way to protect yourself against credit card fraud, here are some suggested precautions you can take to help protect yourself.
* When you get a new card, sign it immediately.
* Carry only the cards you'll need and leave all others in a safe place.
* Get copies of your credit reports at least once each year to make sure fraudulent credit card accounts haven't been opened in your name. For credit bureaus, call Equifax at 1-800-525-6285, Trans Union at 1-800-680-7289 and TRW at 1-800-301-7195.
* Never give your credit card number to someone who calls you on the phone. If you're interested in the product or service, ask the caller to send you additional information by mail. Also ask for the name, address and phone number of the company that is calling.
* Decline if a merchant asks you to write your phone number, address or other personal information on a credit card sales slip.
* When using your credit card at an ATM or gas pump, be sure to always take your receipt with you.
* Keep a record of all your credit cards in a safe place. This record should have the card number, expiration date and phone number of the company that issued the card. With this record, you can quickly report any lost or stolen cards.
* Before throwing out a credit card - even an expired card - cut it into multiple pieces.
* Keep track of when your credit card billing statement usually arrives in the mail. If one doesn't show up on time, contact your credit card issuer. Your statement may have been stolen to get your credit card number.
* If you apply for a new credit card, promptly notify the issuer if it doesn't arrive - it could have been stolen from the mail.
* If you're buying over the Internet, make sure the merchant has proper security measures in place. If you can't determine that to be the case, don't buy.
If your credit or charge cards are lost or stolen, call the issuer(s) immediately. Most card companies have a toll-free number and 24-hour service. By law, once you report the loss or theft, you have no further liability for unauthorized charges. In any event, your maximum liability under federal law is $50 per card.
If you suspect that someone has illegally used your credit card, call the card issuer immediately. You may also want to follow up your phone call with a letter. You may be asked to sign a statement under oath that you did not make the purchase(s) in question, but you cannot be required to do so.
For more information about your credit rights, write to Public Reference, Federal Trade Commission, Washington, D.C. 20580 for the following free publications: Credit Billing Errors, Fair Credit Billing, Lost or Stolen: Credit and ATM Cards, and Telemarketing Travel Fraud.