Each week, the Identity Theft Resource Center works with Scam Detector to bring you news of the most prevalent or most recent scams and fraud crimes of the previous week. The following information has received some of the most attention lately and been reported by an increasing number of victims.
#1 – Keypad Skimming
This crime continues to spread, and the technology that makes it possible is only getting better. Called “skimming,” this crime involves swiping your credit card or debit card through a card reader that a thief has rigged with his own device. You think you’re paying for your gas or groceries, but in reality, you’re also handing over your information to a thief who can then access it and use it for fraud.
There is no surefire way to know that the gas pump where you buy gas hasn’t been accessed by a criminal who installed his own skimmer inside the mechanism, especially since the overwhelming majority of gas pumps in the US open with the same universal key, one that is available for purchase online. The same is true of restaurants where the server takes your card away from view to run the purchase, not giving you visual access to the card reader. But even stores that have customer-use PIN pads could have been infiltrated by a PIN skimmer.
If the mechanism looks tampered with, is too large, or otherwise stands out, don’t use it. Another preventive step is to change your debit card’s PIN number routinely in order to prevent thieves from having both your card information and your PIN. It usually involves going to your bank, but it should be free.
#2 – Internet Loans
Thanks to the prevalence of online banking and connectivity, borrowing money from legitimate banks is easier than ever; even better, it’s now possible for consumers to borrow from anywhere in the country, so finding the best deal is as easy as doing your homework and researching which lending institutions are offering the lowest interest rate.
Unfortunately, with this kind of lending growing in popularity, scammers were quick to seize the opportunity to make a buck off of unsuspecting borrowers. By sending out offers of pre-approved loans with unbelievably low interest rates, fraudulent “banks” began bilking people out of their hard-earned money.
These scams look very legitimate, but as soon as you are asked to pay any kind of fee—a transfer fee, a processing fee, a loan insurance fee, or bond—run away. You’re going to turn over a small amount—small compared to the amount you’re borrowing, which you’re promised will be put back into your checking account or on the prepaid debit card you’re required to provide in order to secure this loan—but that money will disappear, and so will the scammers. Any attempts to reach the loan company after you’ve paid several hundred dollars in fees will turn up nothing.
Remember to only submit loan applications (which contain all of your personally identifiable information, allowing the scammers to also steal your identity) to legitimate, government-insured lending institutions. Also keep in mind that when you borrow money, you’re not the one who pays.
#3 – Extended Warranty Scam
This one is almost too easy. Telemarketers contact you by phone to offer you an extended warranty on an expensive item that you’ve bought, such as a car or home appliance. There’s a high-pressure sales tactic, a guarantee that you can cancel the warranty at any time, and outrageous claims of how good a deal it is and how much is covered.
The only problem is, it’s not true. None of it. These are scams, but even companies that are charging customers for an actual warranty rarely provide any serious coverage, and certainly not enough to justify what you will pay for the warranty in the long run.
In this scam, you’re required to provide a hefty down payment to front the cost of the first year’s coverage, and then the company quickly stops returning your calls or answering your inquiries. Industry experts have long suggested that extended warranties aren’t worth their cost in the first place, but they are certainly something you can negotiate at the time of the purchase, usually ending up with a far better price than the bogus warranty you’re offered by scammers. Don’t fall for their attempts at getting you to pay for something you probably don’t even need and that will certainly not offer you any protection.
For the rest of last week’s top scams, check out Scam Detector’s top ten or take a look at the ITRC website for details.