Every Credit Card Scam Ruining People's Lives Right Now

Share this:

Hari Ravichandran

CEO and Founder of Aura

In this article:

    Identity theft and fraud protection for your finances, personal info, and devices.

    See pricing
    Share this:

    Credit Card Scammers Are Going Full-Force

    Waving your credit card in front of a payment terminal was supposed to make your life easier. But every convenience creates new opportunities for fraud. 

    Over 127 million Americans have fallen prey to credit card schemes — and the problem is only getting worse[*]. In 2021 alone, the Federal Trade Commission (FTC) reported $5.8 billion in fraud losses — a 70% increase compared to the previous year [*].

    With the surge of credit card scams showing no signs of slowing down, it’s crucial for cardholders to learn how to keep their personal information safe.

    In this article, we’ll explore the most common credit card schemes, how they work, and how you can protect your credit card information from scammers.

    How Does Credit Card Fraud Occur?

    Credit card fraud occurs when someone steals your actual credit card, account numbers, or card information to make unauthorized charges. 

    With 70% of Americans carrying credit cards, they offer a unique opportunity for criminals who take advantage of card security flaws or use social engineering attacks to trick you into giving up your card, credit, or money [*].

    So, how do fraudsters trick their victims into giving up their credit card numbers? 

    Credit card scams range from advanced schemes like keylogging software and card skimmers at gas pumps to basic approaches like shoulder surfing

    But no matter the scam, the goal is always the same: steal your credit card information or enough of your Personally Identifiable Information (PII) — like addresses, mobile phone numbers, or Social Security numbers (SSNs) — to gain access to your credit and drain your accounts. 

    Take action: If scammers steal your credit card number, your bank account, email, and identity could also be at risk. Try Aura’s identity theft protection free for 14 days to secure your identity against scammers.

    Warning Signs of Credit Card Theft

    You may not realize that you’ve fallen victim to credit fraud until it's too late. But the sooner you can take action, the better chance you have of protecting your finances. 

    Here are the most common red flags that will warn you if your credit card has been compromised:

    Unsolicited texts, calls, or emails 

    Most scams rely on some form of direct communication. If you see an increase in communications from strangers or companies (via phone, text, email, post, social media, or in-person), you could be a target of a credit card scam. 

    Be especially careful of any communication claiming to be from a government agency or your bank. 

    Bank alerts about suspicious activity

    When a fraudster tampers with your credit card account, financial institutions take notice. 

    Your bank, card issuer, and the major credit bureaus have extensive anti-fraud services like credit monitoring and spending alerts. The bureaus will notify you if they detect suspicious behavior on your account. This activity could include attempts to change personal details or apply for new lines of credit.

    Did you know? It only takes a USPS change-of-address form to change your home address with the U.S. Postal Service. Once criminals reroute your mail, they can steal your identity.

    Suspicious charges to your credit card accounts

    Many fraudsters are careful to make only small changes that will go unnoticed before carrying out larger thefts (a common scam called “carding”). Look for unfamiliar payments, small unexplained transactions, or payment activity from strange locations.

    📚 Related: What Is Credit Protection? Are You Making the Most of It?

    7 Common Credit Card Scams To Avoid

    1. Fraudsters offering interest rate deductions
    2. Charity scams taking advantage of trending news stories
    3. Public Wi-Fi scams that steal your credit card information
    4. Reward scams and fraudulent sweepstakes
    5. Skimming and shimming scams
    6. Overcharge scams that ask you to “verify” your card numbers
    7. Phishing scams asking for payment or card details

    1. Fraudsters offering interest rate deductions

    In an interest rate deduction scam, fraudsters pose as customer service representatives from well-known lenders and credit card issuers. The scammers contact you by email or phone and explain that you’re eligible for a big reduction in your credit card interest rate. 

    This offer will supposedly be a limited-time promotion. The caller (or prerecorded message) will emphasize the need to act immediately and ask you for your credit card information. 

    ⚠️ The scam in real life:

    In April 2021, the FTC announced an $11 million repayment to victims of the E.M. Systems and Services interest rate scam [*]. The scammers set up fake websites before launching a cold call campaign to offer people reduced interest rates — for a fee ranging from $695 to $1495. 

    More than 11,000 became victims of the scam before the fraudsters were finally caught.

    Don’t fall for this scam. Do this instead:
    • If someone calls, texts, emails, or contacts you in anyway and asks for your credit card, hang up. Honest credit issuers do not make unsolicited calls or request payment over the phone.
    • If you want to follow up on an offer that you believe may be genuine, contact the company directly by using the official phone number or email listed in your credit card account contact information.

    💡 Related: Did Scammers Use Your Credit Card Numbers Online? Do This! →

    2. Charity scams taking advantage of trending news stories

    Charity scams are a type of fraud in which scammers pose as known organizations and encourage people to make charitable donations. The donated money is then sent directly to a criminal’s bank account.

    This long-running scam can be easily adapted to trending issues in the news. Fraudsters can quickly edit their scripts and trick donors under the guise of supporting children in need, war victims, or people in disaster areas after a hurricane or flood. 

    Once you agree to make a donation, the scammers may sell your credit card information to other criminals on the Dark Web who can use your data to commit various types of identity theft.

    ⚠️ The scam in real life:

    In March 2021, the FTC shut down a deceptive fundraising ring that operated across 38 states. The tele-funding scam affected 67 million customers; more than 1.3 billion calls were made to steal over $110 million [*]. The fraudsters used robocalls that falsely claimed to support veterans, children's aid, and firefighters.

    Don’t fall for this scam. Do this instead:
    • If you receive calls asking you to donate, share no information — especially your credit card numbers — and end the call. 
    • Before you donate any funds, research the cause and organization using Charity Navigator and the Better Business Bureau’s Wise Giving website.

    💡 Related: Charity Scams — How To Quickly Spot a Fake Charity

    3. Public Wi-Fi scams that steal your credit card information

    The public Wi-Fi scam, or hotspot scam, is a common method of credit card fraud. Hackers use unsecured networks to gain access to devices and steal data, including credit card information. 

    Some criminals create false Wi-Fi signals with embedded tracers that can record credit card details while unsuspecting users enter personal data on their devices. In another variation of this scam, a criminal creates hotspots that prompt internet users to submit their credit card credentials before gaining access. 

    ⚠️ The scam in real life:

    In April 2022, Florida Attorney General Ashley Moody warned people not to file taxes while on unsecured public Wi-Fi connections [*]. Scammers often wait for people to enter sensitive information using Wi-Fi networks (even at home) and intercept the data.

    Don’t fall for this scam. Do this instead:
    • Be sure to install high-level antivirus software on your devices and use a VPN.
    • If you need to use public Wi-Fi, ask a staff member for the correct login credentials rather than joining any open WiFi networks. 
    • Under no circumstances should you submit your credit card details to gain access to unsecured Wi-Fi.
    Aura VPN
    Source: Aura VPN

    4. Reward scams and fraudulent sweepstakes

    Fraudsters are well aware of how much people shop online, and seek to manipulate shoppers who are looking for deals.

    In reward scams, criminals trick their victims by promising discounts or coupons in return for making purchases. You might get an email or text that appears professional in its design and messaging. 

    But instead of legitimate credit card rewards, this scam lures people to click on bogus links that trigger malware downloads. Once that happens, the scammers can access your credit card data.

    ⚠️ The scam in real life:

    The Department of Justice indicted a Mississippi couple on 18 counts of conspiracy related to a sweepstake scam. Pretending to run a multi-million dollar lottery, the defendants managed to steal over $300,000 from victims who prepaid tax amounts on the false winnings [*].

    Don’t fall for this scam. Do this instead:
    • Don’t pay any credit card fees for unexpected “rewards.” Authentic rewards from reputable businesses rarely require upfront costs. 
    • If someone is offering a reward from a reputable company, check their website or reach out to their customer service to verify it’s legitimate. 
    Take action: If you accidentally give scammers your financial information (or its leaked in a data breach), they could take out loans in your name or empty your bank account. Try an identity theft protection service to monitor your finances and alert you to fraud.

    5. Skimming and shimming scams

    In skimming and shimming scams, fraudsters install skimming devices on or inside credit card payment terminals and card readers, which collect card data.

    Known targets for this scam include gas pumps and automated teller machines (ATMs).

    Over the last few years, credit card companies installed Europay, Mastercard, and Visa (EMV) chips to prevent physical card scans. However, card skimming remains one of the most common credit card scams. According to the FBI, skimming costs financial institutions and consumers over $1 billion every year [*].

    ⚠️ The scam in real life:

    Six individuals were arrested in Florida after the FBI and Miami state police busted a skimming operation that stole more than $5 million from victims across eight states [*].

    Don’t fall for this scam. Do this instead:
    • Look for signs of tampering or misuse whenever you use your credit card at a shop or ATM. 
    • Warn employees if you suspect the presence of a skimmer, especially on any external units that aren’t under the watch of company staff (like a gas station pump). 
    • Your chances of avoiding this scam improve if you switch to contactless or mobile payments.

    📚 Related: What Is Credit Monitoring (And Do You Really Need It?)

    6. Overcharge scams that ask you to “verify” your card numbers

    In an overcharge scam, fraudsters send emails or make phone calls notifying you about an overpayment on your credit account. But to access your refund, you first need to “verify” your credit card numbers. In reality, there is no overcharge, and any attempt to verify will send your credit data to a scammer.  

    ⚠️ The scam in real life:

    The electric utility provider Evergy warned customers in Lawrence, Kansas, about an ongoing overcharge scam [*]. In these calls, a fraudster claiming to be an Evergy representative told customers they’ve been overcharged on a recent electric bill and must provide their credit card information to receive a refund.

    Don’t fall for this scam. Do this instead:
    • Do not give up any sensitive information over the phone to unsolicited callers.
    • If you suspect an overpayment scam, hang up immediately, notify your credit card issuer, and monitor your statements for suspicious activity.

    📚 Related: The Top 5 Credit Protection Services (How To Choose)

    7. Phishing scams asking for payment or card details

    A phishing scam is a type of social engineering scheme in which thieves contact victims  through emails, text messages, or phone calls. Fraudsters will often pose as well-known businesses, agencies, or organizations in an attempt to build trust before defrauding victims of sensitive or valuable information.

    For example, someone claiming to be from your bank might call to “warn” you that your credit card numbers have been compromised. They’ll use urgent or threatening language to get you to provide them with your numbers and other sensitive information they can use for fraud. 

    ⚠️The scam in real life:

    In August 2021, federal investigators charged four executives of Allied Wallet for their role in processing over $150 million in credit card transactions through more than 100 sham merchants [*].

    Don’t fall for this scam. Do this instead:
    • If you receive unexpected communication from someone with urgent demands for money or credit card payments, say no. 
    • Never click on any links or download attachments in emails from unknown senders.

    What To Do if You’re the Victim of a Credit Card Scam

    If you fall victim to a credit card scam, a fast response can help limit the financial damage. When you realize you’ve been targeted, take the following six steps to protect your personal information:

    1. Freeze your accounts

    Contact your credit card issuer or bank and ask them to freeze the compromised account. Most financial institutions have security protocols to protect your credit funds. Be prepared to provide extra verification to regain control of your compromised accounts.

    2. Place a fraud alert with all three credit bureaus

    To limit any potential impact on your credit score and credit profile, place a fraud alert with the three major credit bureaus (Experian, Equifax, and TransUnion). These credit bureaus also have monitoring services to detect and prevent future identity theft attempts. 

    You can contact them  by calling: 

    • Equifax: 1-800-525-6285
    • Experian: 1-888-397-3742
    • TransUnion: 1-800-680-7289

    📚 Related: Credit Lock vs. Credit Freeze: Which Do You Need?

    3. Request a free credit report

    When you contact the credit bureaus, request a copy of your credit report. Look through the documents to check for any suspicious activity that could alert you to further fraud. 

    You can also request a free credit report at AnnualCreditReport.com. 

    For instance, if you notice any account information changes, new credit card applications or new cards, or loan requests, alert the credit bureau. 

    Pro tip: Download a credit monitoring app to alert you of any suspicious activity on your accounts or credit file.

    4. Report the scam to the authorities

    Submit a fraud report to the FTC, and file a police report with local police. Reporting fraud provides crucial information to law enforcement that can help them track down scammers or, at the very least, protect other people from falling prey to more scams in the future. 

    • You can submit your report to the FTC online through this website: https://reportfraud.ftc.gov
    • For additional support, contact the FTC at their Identity Theft Hotline: 1-877-ID-THEFT (1-877-438-4338)

    Also, report the fraud wherever your card was used. Fraud departments at many companies can stop a criminal from making any more unauthorized charges.

    Take action: Protect yourself from the risks of identity theft and fraud with Aura’s $1,000,000 in identity theft insurance. Try Aura free for 14 days to see if it’s right for you.

    5. Create new secure passwords

    To help prevent further unapproved use of your credit card, change all of your passwords. Many fraudsters can access multiple accounts through a single compromised login — so you should quickly adjust your passwords after a breach. 

    You can increase your security when you use a password manager. Aura’s password manager stores all your passwords in a secure place and can alert you if an account has been compromised. 

    6. Dispute fraudulent charges

    Thankfully, The Fair Billing Act protects consumers from the financial fallout of harmful credit card scams [*]. Once your accounts are secure, you can seek reimbursement. Contact the affected companies to initiate chargebacks on any fraudulent payments made on your credit card. 

    7. Regularly check your credit report and bank statements 

    Scammers are almost always after your financial accounts. Check for the warning signs of identity theft — such as strange charges on your bank statement or accounts you don’t recognize. An identity theft protection service like Aura can monitor your credit and statements for you and alert you to any signs of fraud. 

    💡 Related: Is Discover Identity Theft Protection Worth It? Pros, Cons & Alternatives

    Protect Yourself From Credit Card Scams

    1. Only share information on “secure” websites and stores. Reputable businesses have advanced cybersecurity features to keep your data safe from scammers and criminals. You can usually determine if a web page is secure if you see a padlock icon before the URL. If the icon is not present, do not submit your credit card details on that page. 
    An example of a “secure” website using SSL protection
    An example of a “secure” website using SSL protection. Source: Amazon
    1. Keep your devices updated and safe. Even with strong device protection, criminals can intercept your credit transfers on public networks. Do not input your credit card information or use online banking services when connected to open hotspots — you don’t know who is watching.
    2. Be cautious about sharing your credit card information. Store your credit cards in a safe space and only share your card numbers with a trusted third-party service after you have confirmed its authenticity. Also, beware of phishing emails, texts, and calls that are designed to steal your information.
    An example of a phishing email
    An example of a phishing email. Source: USA Today
    1. Avoid public Wi-Fi networks for shopping or entering card details. Almost 49% of online shoppers used credit cards to make online purchases in 2021 [*]. Make sure you use antivirus software and a secure VPN to protect your credit card details from hackers. 
    2. Consider signing up for identity theft protection. Aura’s top-rated identity theft protection monitors all of your most sensitive personal information, online accounts, and finances for signs of fraud. If a scammer tries to access your accounts or finances, Aura can help you take action before it’s too late. Try Aura’s 14-day free trial for immediate protection while you’re most vulnerable.

    If the worst should happen and you fall victim to a credit card scam, an identity theft protection service can help you recover lost money. All Aura plans come with 24/7 customer support from a team of Fraud Resolution Specialists and $1 million insurance coverage for eligible losses due to identity theft. 

    Criminals Are Smart — You Have To Be Smarter

    Credit card fraud isn't just something that happens to somebody else. If you own a credit card, there's a good chance that you'll fall victim to fraud sooner or later. Almost 60% of cardholders have found an unauthorized transaction on their account at some point [*].

    If you want to keep your personal data and finances safe, you must protect your credit card information. 

    With Aura, you can enjoy the benefits of continuous online surveillance, real-time alerts of potential identity theft, and comprehensive insurance coverage for stolen funds. Aura provides peace of mind and financial protection that helps you use your credit cards worry-free. 

    Your shield against sinister credit card scams — Get 50% off Aura today.

    Related Articles

    An illustration of a thief stealing a credit card
    Family Safety

    Help! A Family Member Opened a Credit Card In My Name

    It’s a crime for a family member to open a credit card in your name (and without your knowledge). Here’s how to handle this awkward and damaging situation.

    Read More
    April 13, 2022
    how to know if your identity has been stolen
    Identity Theft

    Here's How To Know If Your Identity Has Been Stolen

    Nearly 50% of Americans have experienced identity theft. Here's how to find out if someone has stolen your identity.

    Read More
    September 26, 2022

    Try Aura—14 Days Free

    Start your free trial today**

    This is some text inside of a div block.

    Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.

    1. Financial identity theft and fraud
    2. Medical identity theft
    3. Child identity theft
    4. Elder fraud and estate identity theft
    5. “Friendly” or familial identity theft
    6. Employment identity theft
    7. Criminal identity theft
    8. Tax identity theft
    9. Unemployment and government benefits identity theft
    10. Synthetic identity theft
    11. Identity cloning
    12. Account takeovers (social media, email, etc.)
    13. Social Security number identity theft
    14. Biometric ID theft
    15. Crypto account takeovers