Credit Card Scams

Last week, just a few days after new year I received my business credit card statement by mail. I make it a point to glance at the balance first and noticed it was a few hundred dollars more than I expected. Upon reviewing the details, I found a list of purchases, exclusively from gas stations, totaling almost $500 . Someone was gas bar hopping all over town filling up his car using my credit card! How can that be? But my card was with me all the time. I called up the credit card company and it turned out this one was a no-brainer. I was among the hundreds that complained of the same irregularity. Welcome to the club. The card company immediately froze my card and sent a new card in the mail. Apparently gas bars are the easiest to scam , the fact that all one does is insert the card and fill the tank, no pins nor signatures required – as simple as ABC. How the scammers faked my card I have no clue. The good news is majority of gas bars won’t allow transactions greater than $75. The thought of some truck rig filling up its gigantic fuel tanks on your credit card is quite scary.

And when you think my story ends there, it didn’t. Just yesterday, I got a call from my bank informing me that my ATM card was frozen. Whoa? What could be the problem this time? I was taken aback. A few minutes before the call I verified my account on internet banking and everything looked okay. It turned out that my ATM card was identified to have been used at a “high risk” ATM machine location. The customer service clerk even gave its exact address. As precaution, because my card could have been compromised, they cancelled my card and issued me a new one. Close call, for me I thought. Smart, for the bank that is.

The bottom line here folks is credit card scams are on the rise. What happened to me is an ant bite compared to what others have to go through. I haven’t paid a single cent of liability from the fraud – yet, but the fear that sooner or later these high tech thieves may commit the perfect crime without the slightest trail of fraud and rip you off with thousands of dollars is very frightening . The threat of some unknown entity hijacking a very personal possession such as a credit or ATM card at moments one least expects is just excruciatingly stressful. Already we see identity thefts – some sophisticated criminals hijacking someone’s identity, taking over the person’s assets and disbursing them at will ! Identity thefts cost Canada some $2.5 billion a year. And we haven’t mentioned anything about internet related crimes yet! There are precautionary measures people can undertake but they are not completely fool proof.

So far banks, the main operators of the credit card business have done quite a noble task of absorbing losses as best they could. Despite the hundreds of millions of dollars of bad loans and fraud losses, banks still manage to rake in billions of dollars in profits. This could not go on forever though. Something has to change . Thieves and scammers are becoming much smarter that they can now hijack your browser and spoof on your keystrokes and bingo – you’ve just handed them your checkbook. Somewhere along the line the human race must stop thinking about going to Mars and fix the damn problem with a more sophisticated and secure technology. The problem is the inventors of technology are more often the brains of scammers. Where the brains of technology proliferate, scammers thrive. When will governments, financial insititutions and technology vendors jointly declare an all out war on high tech scammers? When banks get burned so bad that their write offs of fraud losses far exceed their profits?


15 Responses

  1. What a coincidence,I was just reading this piece of news this afternoon, about a local card fraud syndicate going international in their operations. Check out the story here:


  3. credit card companies make so much money by the very high interest rate they charge to customers. This is why even after the write offs they are still on top. Supreme bloodsuckers.

  4. Snglguy – thanks for the info. Boy really looks like scammers are increasingly becoming international. The interpol will have a lot of sleuthing to do.

    AW – credit card rates are quite ludicrous in some instances
    (20%-30% PA). I believe this has to do more with high risk customers credit wise.They charge them an arm and a leg because they have nowhere else to go. For those with good credit rating, reasonable and even low interest rates are available.

  5. Ugh! You are not alone BW! I was in total disgust when I saw my bank account (credit and savings account at that, the thief was heartless!) were WIPED-OUT! I was crying thinking that I won’t celebrate Christmas anymore as fun as I used to. I immediately checked my online banking and saw 3 Identity Thieves robbed me off and left me with only 20 cents. I went to the bank and they told me this normally happens everytime especially before the holidays. The name and accopunt these people use are a hoax. They got my ATM number when I replied back from my bank’s email giving out my card number for “information check”. The bank said it was a fraud and they would never do any information checks thru email. They changed my ATM card number and returned the whole amount from my savings and checking account.

    I am more careful now not to reply on emails from your bank, paypal or ebay asking from your account number, username or password.

  6. teacher sol> sorry to hear about your sad experience.

    bw> your welcome 😀 we cardholders really should be up to date on the shenanigans of these hi-tech pirates.

  7. I’m glad this hasn’t happened to me. I’ve heard about not emailing out your bank and credit information even though it looks like it’s your bank asking for these information. Because banks will never ask for these. As for credit cards, I’ve had enough of their high interest charges. I have applied for a Line of Credit to my bank and transferred my credit card charges to my LC. Very minimal interest = 4%-6%.

  8. Teacher Sol – really glad to hear that bottom line you did not suffer any financial loss. Looks like you have been one of the numerous victims of what they call “phising”. Cyber criminals are very sophisticated nowadays. The worst form of identity theft is those that do not require any help from victims. For some reason these crooks grab hold of your credit file and obtain get a loan or a second mortage on your house without your knowledge. They would make phone calls pretending to be you! Very devastating indeed. One way to protect yourself is get a credit report from the crediy bureau on a regular basis, maybe every 6 mos. to see if there are any suspicious credit activity in your file.

    Snglguy – you bet . Awareness and knowledge of the modus operandi of these thieves is key to protect one self.

    Niceheart – agree. Line of credit is always the best way to avoid paying excessive interest rates and controlexcessive credit card spending. One or two low interest, low limit paying credit cards is really all one needs for emergency purposes.

  9. Scarry… even more than the movie “Hostel” because it can hit my bankaccount 🙂

  10. Credit card fraud is pandemic. More alarming is phising on the internet, possibly the most deceptive con; especially for those who are not tech savvy. More consumer awareness is key…

  11. Good thing this hasn’t happened to me. I hope it won’t. The banks should devise a system that will detect frauds easily even before they are committed. I don’t know if things are in place. For instance, if you have a transaction in one State and after only a few minutes, there’s another one in yet another distant State, this should trigger an alarm and alert the establishment to do some verification before approving the transaction.

  12. Yes – this controls appears to be already in place. Every credit card company nowadays operate an anti-fraud unit to handle suspicious transactions. They also check unusual patterns and verify the transaction with the client. With internet purchases they will never authorize a purchase if the delivery is not at the card holders’ address. Problem is the tighter they get, the smarter the crooks become!

  13. The thought that there are many hi-tech thieves out there looking for victims is quite scary. I’ve never been a credit card person. But there are times you need to use the credit card to purchase items online. My husband recently installed an anti-spyware program in our PC. It turned out that we have been hacked. There were hi-tech people who monitored our every keystroke! We have to carefully check our credit card balance when it arrives.

  14. It is truly scary and talking about spyware, I stopped using Internet Explorer because it is very vulnerable to hijacking. I use Firefox now and downloaded Microsoft Anti spyware beta version to protect my system online. I also use another spyware like Spybot killer to recheck my system just incase MS Anti spyware doesn’t catch it. These anti spyware programs need to be updated all the time though because new stuff comes up all the time. Firewalls are also great in that you can be more granular in who you allow to connect. It’s just a drag
    really and this is all because Windows is crap. My older daughter has a MAC powerbook and I’m seriously thinking of going MAC all the way for my home PC use because of its low vulnerability to these viruses and spyware.

  15. Three times a week regularly I have to deal with spyware on my computer – I delete it, I order updates for my antivirus software – I spend so much time and effort just to keep the thieves away. And I don’t understand why they can’t invent something reliable to provide 100% protection for both banks and customers.

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