Learn The Most Common Credit Card Scams to Prevent TheftDocument Transcript
Avoid Credit Card Dispute by Being Aware of
Any type of credit card dispute can mean a lengthy process of filing claims with banks,
legal authorities and retail outlets. By being aware of the popular scams that are
operating over the Internet, mail and phone you can make yourself less vulnerable to
these criminals, conmen and scam operators while avoiding becoming the next victim of
credit card fraud.
According to the FBI, the following are the most common credit card scams currently
• Telemarketing Fraud: Whenever you give your credit card information over the
Internet, mail or phone you run the risk of becoming the victim of a
telemarketing scheme. There are a few phrases that are commonly used by
illegitimate telemarketers that should be warning signs of fraudulent deals.
1. You must act “now” or the offer will not be good.
2. You have won a “free” gift, vacation or prize but you have to pay for
postage and handling or other charges.
3. You must send money, give a credit card number, bank account number
or have a check picked up by courier.
4. You can not afford to miss this “high-profit” or “no-risk” offer.
• Nigerian Letter or "419" Fraud: Nigerian letter frauds use impersonation fraud
with an advance fee scheme. The con artists will mail a letter from Nigeria that
offers the receiver an "opportunity" to share in a percentage of millions of
dollars. The sender claims to be a government official trying to transfer illegally
out of Nigeria. The victim is encouraged in the letter to send information to the
fake official such as bank name, account numbers and other identifying
information using a fax number provided in the letter. This type of fraud is also
conducted via E-mail through the Internet.
• Advance Fee Scheme: An advance fee scheme involves a victim being asked to
pay money to a false entity in return for something of value, usually a loan, some
kind of investment, or a gift
• Common Health Insurance Frauds: Many Insurance companies are being billed
by criminal insurance fraud schemes. The following are the most common
insurance scams currently operating.
1. Medical equipment fraud is usually carried out over the phone, targeting the
elderly or sick who are asked for checks, credit card numbers or cash in
return for bogus medical devices.
2. Equipment manufacturers will offer "free" products to victims then charge
insurance carriers or Medicare.
3. "Rolling Lab" schemes involve unnecessary tests which are performed on
unwitting victims at health clubs, retirement homes or shopping malls and
then billed to insurance carriers or Medicare.
4. Services not performed involve fraudulent providers billing insurers for
services that were never performed by falsifying bills.
• Redemption/Strawman/Bond Fraud: This scheme involves criminals who claim
the U.S. Government or the Treasury Department controls all bank accounts and
for a fee can be accessed in order to erase debt or purchase merchandise. The
conmen operating this scam usually refer to the process as “Redemption,”
“Strawman” or “Acceptance for Value.”
• Investment Related Scams: Criminals will offer a "letter of credit" or "bank
guarantee" as an investment opportunity and in return for purchasing the
“credit” they are promised huge interest rates of up to 300 percent annually.
• Prime Bank Note: This investment scheme offers high yields in a short period of
time. Criminals claim to have access to "bank guarantees" which they are able to
buy at a discount and turn around and sell at a premium. By reselling the "bank
guarantees" they promise victims big returns on their investments.
• Ponzi Scheme: A Ponzi scheme is an investment fraud where criminals promise
high financial returns or dividends not available through ordinary investments.
Instead of investing the victim’s money, the conmen will pay "dividends" to
initial investors using money “invested" by subsequent investors.
• Pyramid Scheme: Pyramid schemes are marketing and investment frauds where
victims are offered the opportunity to market a product. The real profit is not
made by the sale of the product, but by the sale of a subsequent victim buying
into that same opportunity to market the same product. Participants are
promised return on their original investments by initiating two or more
prospects to make the same investment. The supplies of potential investors
eventually fall off and as a result the pyramid collapses.
Knowing that these scams are in operation and how they are being conducted will give
you the heads up you need to be one step ahead of the criminals attempting to steal
your money. If you are ever approached, be sure to document the details so you can
report the scam to law enforcement. If you wish to remain anonymous there are
hotlines available for reporting a crime without having to reveal your identity.
Hornberger & Brewer have decades of experience dealing with credit card dispute,
credit card fraud and identity theft. They understand there are many opportunistic
criminals out there operating sophisticated scams. They also understand that any type
of credit card dispute can be very complicated. Helping all of their clients navigate the
legal procedures required to resolve credit card dispute quickly and successfully is one
Hornberger & Brewer’s top priorities.