banking - WKTV Journal

Local law enforcement and the Better Business Bureau share tips on how to recognize credit card scams and how consumers can protect themselves. (Image Courtesy, pxhere.com)

By D.A. Reed, WKTV Contributing Writer

Since the inception of credit and debit cards, fraud has become more and more widespread.

And with the current culture of communicating and ordering online, scammers are getting creative — and consumers are scrambling to sort fact from fiction in an effort to keep their finances and identities safe.

“Be an informed consumer, that’s the best advice I can give you,” said Troy Baker, education foundation director of the Better Business Bureau (BBB).

As of June 30, 2022, the Federal Trade Commission received nearly 1.1 million consumer reports about fraud nationwide. Of this total number, 214,446 reported using some type of payment method, with 42,545 consumers reporting paying with a credit card for a total loss of $110.4 million. This puts the average consumer loss at $2,595.

Subscription scams

According to Baker, the BBB classifies credit card cons into four categories. The most common are subscription scams cloaked in offers of free trials. Hidden in the fine print of that free trial is the agreement to sign up for a subscription.

Year to date, the Federal Trade Commission reports credit card loss at $110.4 million. (Image Courtesy, pxhere.com)

Baker said consumers think they have been victims of fraud or that their card has been stolen, “but really, you had given them permission by doing this free trial. They hide the agreement in the fine print a couple pages deep on the website, and usually you have a very short window to cancel before that subscription kicks in and you get billed the next month.”

In other words, consumers have approved the use of their credit card without knowing it.

Phishing emails and text messages

Phishing emails and text messages also are popular among scammers, stating a credit card has been opened in the consumer’s name and to click on a link if they did not, in fact, open that card.

“We also see scams where someone is told they have some form of debt outstanding or have a warrant out for them and the caller will demand payment in the form of gift cards,” said Lieutenant Rory Allen, Wyoming Department of Public Safety.

This con plays on the fears of the consumer.

“The consumer thinks maybe I should click on this link to make sure they don’t bill me for something,” Baker explained. “That’s what the scammers want. They want you to feel that confusion and click on the link thinking your taking action to protect yourself when, in reality, the action you are taking is going to harm you.”

Computer repair scams

Both Allen and Baker have seen computer service cons where scammers tell consumers there is something wrong with their computer but the scammer can fix it for them. Once they have the consumer’s credit card number, they disappear.

Fraud reports by payment method, 2022 YTD. (Courtesy, Federal Trade Commission 2022)

Online holiday shopping scams

Baker said another issue is consumers buying items on websites they are not familiar with.

“We especially see this closer to Christmas,” Baker said. “Scrolling through social media, you see the things that really catch your eye and seem like a great deal. So you click buy and put your credit card in, thinking that you’re going to get this great deal, when it turns out the company isn’t real or doesn’t have the track record that you think it does, and they don’t deliver what they promised. But they’ll charge your credit card for it.”

Banks and credit unions have put security measures in place to protect consumers, but scammers still manage to get through.

A local consumer’s personal story

Kelly* (name changed at the source’s request), a Rockford resident, told WKTV that her husband’s card was used to make charges in Louisiana and Arkansas at gas stations and Walmart stores, with the charges anywhere from $40 to $300.

Adding to their confusion was the fact that the charges were happening in different places at the same time.

Kelly happened to see the charges on the credit card statement and called the bank to report them as fraud. The bank shut down the card and refunded their money, but the mental and emotional damage has remained.

“I’m paranoid now and check our bank account and credit card account every day — still all these years later,” Kelly said.

Kelly and her husband still don’t know how the scammers obtained their card number.

Corrections time-consuming

Allen said frustration and anger in the victim is normal.

“It can be a lot of work to correct the issue if a credit/debit card is used in a fraud,” Allen explained. “In addition to the financial burden, it costs victims wasted time correcting the issue, filing reports, etc.”

Another local resident’s account

Stacy* (name changed at the source’s request), a West Michigan resident, said her husband’s credit card was used for seven fraudulent charges totaling approximately $1,200 on Walmart.com back in December 2021 — and the issue wasn’t fully resolved until April 2022.

Stacy and her husband reported the charges as fraud to their bank, who said they would close down the account.

“Then we get a letter in the mail saying that unfortunately the merchant has provided us with proof that you have received said items,” Stacy said.

Stacy asked to see their proof and was provided with FedEx tracking numbers that stated the items ordered had been delivered to her address. The order contained Stacy’s address, her husband’s name, and phone number, but an unknown email for confirmation and delivery status. The email IP address was based in Holland.

“It’s still a mystery,” Stacy continued. “I don’t know the scam; I’d love to know the scam. It made me so mad that someone could do this and stick me with the charges.”

It was April 2022 before the bank finally took the charges off their credit card statements for good.

Allen said fraud can cost citizens thousands of dollars each and cause long-lasting effects on finances and credit scores.

The FTC received 10,926 identity theft reports from Michigan consumers, 2022 YTD. Of this total number, 3,853 reported credit card fraud. (Courtesy, Federal Trade Commission 2022)

How can consumers protect themselves?

“We advise anyone who believes they are a victim of fraud to contact the police as soon as possible to file a report,” Allen said.

“If you believe a credit/debit card is being used by someone else, then contact your bank or credit company as soon as possible to turn the card off to avoid further charges.”

Is it really free?

Baker advises being wary of anything offered for free where the consumer only has to pay shipping and handling.

“There will be a catch,” Baker said. “Usually, it’s a (hidden) subscription.”

Slow down and research

Baker also advises taking your time.

“Before you put your credit card in, before you buy something, make sure you’ve done your research on the company you’re buying from. Take your time before you make that purchase decision. That time is really going to protect you from a lot of these scammers.”

And — even with the amount of credit card fraud out there — Baker said consumers should still use their credit cards and that they are still the safest route for a consumer to go when making purchases.

“While there is certainly a lot of credit card fraud, our advice is to use your credit card when you make these kinds of purchases,” Baker explained. “At least with a credit card, there are some protections for you. You can dispute the charges, you can work with your bank if there is fraud. And in many cases, there is a mechanism to get some or all of your money back.”

To learn more about credit card scams and how you can protect yourself, visit the Better Business Bureau at Better Business Bureau and the Wyoming Department of Public Safety at Wyoming Department of Public Safety

*Name changed at the source’s request.

D. A. (Deborah) Reed is an award-winning author of young adult novels and a creative writing instructor from the Grand Rapids area. To find out more about D.A. Reed, visit her website: D.A. Reed Author

By Dave Stanley
Integrity Financial Service, LLC

“Numerous options exist for a safe place to keep your money; the secret is finding the best return without any exposure to risk.” Dave Stanley

Insulating your money against inflation, theft or catastrophe is as simple as taking it out from underneath your mattress and opening a savings account. The three most common are transactional savings accounts, money market accounts, and certificates of deposit. Two alternative accounts are high yield savings and specialty savings accounts. They all operate under the same premise: money given to the bank will earn interest.

Traditional Transactional Savings Accounts

The simplest way to store money with a financial institution is to open a traditional savings account with a small minimum deposit. If the minimum is maintained, the account holder usually avoids fees. Shop around and compare factors like initial deposit and balance requirements, interest rates, and other fees. While being highly liquid makes it easy to withdraw cash and move funds between accounts, they typically have the lowest interest rates. Accounts are federally insured through the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Association (NCUA), protecting your savings from bank failures.

High Yield Savings Account

High yield savings accounts offer interest rates usually 20 to 25 times higher than the national average for transactional savings accounts. While potentially available at your local bank, the highest interest rates are typically offered by online banks. Electronic transfers between institutions are speedy and straightforward, making it easy to move your funds if needed. FDIC or NCUA also insures them. Keep in mind that banks offering high yield savings accounts do not typically provide checking accounts and other services like ATM cards.

Specialty Savings Account

Specialty savings accounts are specific to a particular savings goal. These include accounts you can open for children like savings accounts, student accounts, or 529 college savings accounts. Also included are home down payment savings accounts, health savings accounts, and traditional or Roth IRA’s. These accounts generate interest and have either low or no maintenance costs. Be aware of strict and potentially costly regulations related to early withdrawal of funds. There are also specifics concerning who can open what type of account.

Money Market Account

Money market accounts typically offer higher interest rates than traditional savings accounts, .02% higher on average. This type of account is special in that you can write checks and use a debit card, like a checking account. However, there are limits to the amount of money and the number of withdrawals allowed. It’s also not uncommon for higher minimum balance requirements and fees associated with money market accounts.

Certificate of Deposit (CD) FDIC Insured

A certificate of deposit, or CD, is an account with a fixed interest rate, term length, and maturity date. The fixed date means funds cannot be accessed early without penalty. These accounts typically pay higher rates than traditional savings accounts and are less liquid. The risk is very low, and the return is guaranteed, making it a safe place to store funds that you plan to use in the future.

Each of these accounts can help achieve your savings goals. Evaluate the pros and cons of each depending on your goals and financial situation. Be sure to explore various institutions for the best rates possible, and as always, consult a trusted financial advisor regarding any questions you may have.

Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management