Here’s What to Do the Next Time a Business Asks for Your Credit Card by Phone or Email

When we provide our credit card information via remote means, we are often made more vulnerable to identity theft. Here's why.

Recently, I was booking a hotel reservation for a family member and in the process was asked to provide certain information. It was a simple third-party credit card authorization. What could possibly go wrong?

Plenty.

Beyond the fact that I am professionally paranoid — I wrote a book about it — there are so many ways for your information to wind up in the wrong hands, especially your credit card information. When we provide our credit card information via remote means, we are often made more vulnerable to identity theft by the authentication process itself.

There is no best way to conduct this sort of business remotely without putting ourselves in danger of becoming victims of identity theft, but there are better and worse ones. These days, it’s more expedient to focus on the very few ways sensitive information can be made available to third parties without creating unnecessary exposure.

A Better Way for Another Day?

If you are unfazed about sending your information via electronic means, consider something similar: paying for a meal with a credit card. We expose our data and send it on a journey every time we pay a bill at a restaurant.

I saw my first portable credit card reader on American soil the other day when paying the bill at a new restaurant. First, I want to say that the lunch was excellent, and I would have gone back even if the waiter hadn’t trotted out that marvelous handheld identity theft reduction device. I am scam-obsessed, and have long envied our friends on the other side of the Atlantic — and locations in other directions as well — for the ubiquity of at-table card payment.

The reason those machines are great is simple: The server has no opportunity to write down or photograph your card information.

Let that sink in … It’s unsettling now that you think about it, right? All those times a server has walked away with your credit card, what stopped him or her from snapping a quick pic of the front and back before returning to your table?

That reader is new technology. The service industry is finally (belatedly) getting hip to the challenge of protecting consumers from identity theft and other scams, but what should you do while it’s still in catch-up mode?

How to Send Your Stuff

The form that was emailed to me by the hotel made the threat of a sneaky waiter snapping pics of my credit card seem like amateur hour.

Obviously, the reservations department asked for my credit card number and expiration date. They also wanted my billing address, work and home phone numbers, email address and signature. Then there was the outline of a box, under which were the words: “Copy front of the credit card” and “Copy of ID.”

Now, I’ve already confessed to being someone who looks for the angle crooks will try to use. The idea of sending, in addition to all the other information requested, an image of a valid form of identification — in my case, my driver’s license — was truly unthinkable. I’d sooner have my Social Security number puffed out by a skywriter over the House that Ruth Built during a Yankees-Red Sox playoff game. (Not convinced? Read up on the surprising ways identity theft can hurt you.)

The form gave me the option of sending my cornucopia of sensitive personal information via email or by way of fax. Which is the better choice?

Hackers Are Really Good at What They Do

Phone calls and faxes conducted over phone lines can be rerouted, emails can be intercepted. Phone calls can also be listened to, and therein lies another problem. When you call a service provider — any kind that costs a set amount every month— there will come a time during the call when you will have to provide your Social Security number so that the company can run a credit check. A service rep is going to ask you for it — the whole thing.

Remember the waiter? Same problem.

Absolutely nothing can stop that person from writing down your information. And before you ask why you can’t input the information on your keypad, remember: Phone calls are not secure, the tones can be intercepted. Encryption is both complex and costly. This is why the federal government has been investigating the possibility of a universal identifier. But in the meantime, those credit checks or authentications pose the same, if not greater, peril as your credit card’s journey at most restaurants.

Old Is New (But Not Fail-Safe)

As counterintuitive as it seems, using the fax in this scenario is the safer path, though it is not completely safe given the possibility of data interception.

Pro tip: Call before sending a fax that contains personally identifiable information or anything else that is for as few eyes as necessary, and ask the person on the phone if they are near the fax machine, or if not if they can be. Call again to make sure the transmission has been retrieved and isn’t just sitting in a tray waiting for a scam artist to come sauntering by with a smartphone and a shopping list of things they want to purchase using your information.

While we await better solutions, you are the ultimate guardian of your personal information, and your vigilance given the myriad threats out there will lead the way for change. In the meantime, get in the habit of monitoring your finances for any sign of mischief. You can view two of your free credit scores, with helpful updates every 14 days, for free on Credit.com.

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The post Here’s What to Do the Next Time a Business Asks for Your Credit Card by Phone or Email appeared first on Credit.com.

Careful: 5 Credit Card Scams to Be Aware Of

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Identity thieves will do whatever it takes to swindle you out of your hard earned cash. But it doesn’t always stop there as credit cards are also a viable option.

In the past few years, we’ve watched as several big-box retailers, including Target and Home Depot, scrambled to make amends with customers who were affected by breaches to their payment processing systems.

Those stories were plastered all over the news, but we don’t see nearly as much coverage of the isolated incidents that cost consumers millions of dollars and sabotage their credit each day. 

Let’s take a closer look at some common credit card scams:

1. Fraud Alerts

Many credit card issues have fraud departments intact to monitor activity. So when you receive a call alerting you of an issue with your card, chances are you’ll be more than willing to do whatever it takes, including confirming personal information, to get the problem resolved. But proceed with caution as you may be at the hands of a fraudster.

A better option: call your card issuer directly to confirm an issue even exists and resolve it from there.

2. Skimming

This scam is the reason why I always try to use cash when dining out. It’s as simple as pie for perpetrators since all they have to do is swindle you out of your credit card and swipe it through a skimming machine to obtain all your account information. Once they’ve done so, new cards with your data can be created and used to fund a lavish dining experience, shopping spree, or whatever they choose to spend the money on.

3. Jury Duty

Have you been summoned to jury duty in the past? If so, you’ve received a court notice with instructions on the date, time and location to report. But what happens if you receive a call stating that you’ve missed an assignment and must confirm identifying information to avoid a trip to the slammer? If you’re wise, you’ll hang up the phone and give the court a call. Reasoning: fraudsters use this tactic to con you out of your social security number, address, date of birth, and other account information, creating the perfect opportunity to hijack your identity.

4. Chip Cards

Select credit card issuers recently welcomed the EMV credit cards to their arsenal. The deadline to switch was October 1, and fraudsters found a way to capitalize on the transition. How so? By contacting account holders via email and requesting that they confirm personal information in order for a new card to be issued.

5. Debt Consolidation

“For a low monthly fee, you can take care of all your credit card obligations and be debt-free in just a few short years. All you have to do is confirm your account information, make a one-time payment, and you’re all set.”

Wishful thinking. But unfortunately, scores of individuals succumb to this tactic out of sheer desperation and once they realize the alleged company is a scam, their deposit is already gone along with all their personal and account information.

The post Careful: 5 Credit Card Scams to Be Aware Of appeared first on ReadyForZero Blog.

The Top Scams of 2015

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Scams cost consumers more than $1 million this year, according to a roundup of reports by the Better Business Bureau. Since that figure only accounts for incidents reported to the BBB, actual losses may be even greater. The good news is 85% of consumers who reported these scams realized what was going on before it was too late.

Then again, the best defense against scams is to know the signs. Most scams on the BBB’s list happened over the phone and involved asking consumers to pay for something they shouldn’t, such as winning a sweepstakes. Here are the 10 most common scams reported to the BBB this year.

1. Back Taxes

Reports this year: 2,413
Percentage of all reports: 24%

Someone claiming to be from the IRS calls saying you owe back taxes and must pay immediately. They may demand payment by money transfer or prepaid debit card. The first sign it’s a scam? The IRS never calls.

2. Debt Collection Scammers

Reports this year: 835
Percentage of reports: 8.3%

Here, someone calls saying you have an unpaid debt and could face wage garnishment, lawsuits or jail time. But even legitimate debt collectors can’t make threats. If you have debts in collection, know your rights so you can deal with the issue. (Here are a few tips for spotting a debt collection scammer.)

3. Sweepstakes, Prizes & Gifts

Reports this year: 811
Percentage of reports: 8%

Someone calls, emails or writes to say you’ve won a prize and need to pay delivery fees. But winning a contest you didn’t enter should be a red flag, and you shouldn’t pay for something you’ve won, the BBB says.

4. Tech Support Calls

Reports this year: 608
Percentage of reports: 6%

Someone calls to say they’ve detected a virus on your computer. They request remote access, perhaps for a fee, when all they want is to look through your data.

5. Government Grants

Reports this year: 574
Percentage of reports: 5.7%

You receive a phone call saying you’ve won a government grant and need to pay processing fees. Of course, the victim wires the money only to never receive the grant.

6. Advanced Fee Loans

Reports this year: 388
Percentage of reports: 3.8%

While researching loans online, you come across an ad and click for more info. After sending the application, someone calls or emails to say you’ve been approved — that is, if you send money. Not only do you lose the money (and the loan), you’ve just given a thief your personal info, exposing yourself to identity theft. A criminal can use that info to open new accounts in your name. You can spot these new accounts by monitoring your credit. You can get your free annual credit reports at AnnualCreditReport.com and you can check your credit scores for free every month on Credit.com to spot signs of this type of fraud.

7. Credit Cards

Reports this year: 306
Percentage of all reports: 3%

Someone posing as your credit card issuer calls to say you qualify for lower interest rates, you just need to “confirm your account details” and then that info is used to perpetrate fraud.

8. Work-From-Home Scams

Reports this year: 261
Percentage of all reports: 2.6%

You find a job online that lets you earn lots of money from home. Sound too good to be true? It is. Research whoever you work with, because your info could be stolen. You could send your resumé only to never hear back, or worse, get involved in a bad business.

9. Fake Checks/Money Orders

Reports this year: 242
Percentage of all reports: 2.4%

Someone sends a check or money order for more than he owes, and asks you to pay back the difference. By the time you’ve sent payment, the first check has bounced.

10. Lottery ‘Winnings’

Reports this year: 241
Percentage of all reports: 2.4%

A phone call, letter or email says you’ve won a lottery, but need to pay taxes in order to receive the lump sum.

Things to Remember

Common sense will help you avoid losing money or having your identity stolen. But never be too careful: Don’t share personal info. with strangers, especially if they contact you first, and research everyone you do business with. Fraud and identity theft not only cost money, they can damage your credit. Make a habit of reviewing your credit scores for signs of fraud, which you can do for free every 30 days on Credit.com.

More Money-Saving Reads:

Image: iStock

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Ding-Dong: The Delivery Scam That’s Coming to Your Front Door

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Beware of strangers bearing gifts — according to the Better Business Bureau, scammers are putting a new and brazen spin on the skimming scheme this season.

In this scam, targets receive a call from a delivery company saying a package is on the way. Right on cue, a delivery man arrives with a gift basket sans card. (Some make an excuse, saying the card is being delivered separately.) Before the delivery man leaves, he asks the target to pay a nominal “verification fee” in order to receive the basket. Alternately, she’ll need to provide a debit or credit card in order to verify she’s of legal drinking age, as there’s wine in the basket. The delivery man plugs the info into a handheld scanner and — ta-da! — the scam is complete.

Consumers should know: These requests are just an excuse to “skim” the card’s account number, PIN and security code. Once the thief has this information, he can use the card to rack up fraudulent purchases or steal your identity.

Don’t Let It Happen to You

The BBB says to be suspicious of packages from an unrecognized delivery service and not to give credit card or debit card info to anyone at your door. Credit cards aren’t used to verify age, though a delivery man may ask for identification to prove you’re of legal drinking age if a parcel contains alcohol.

Remember, many scams crop up during the holidays. Watch out for phishing emails promoting great deals, fake retail websites, phony charities and pyramid schemes masquerading as social media gift exchanges. Verify any request for payment info, refrain from clicking on links in suspicious and unsolicited emails, shop only on trusted, encrypted sites and monitor your credit card and debit card statements for signs of fraud.

Also monitor your credit if you have reason to believe your personal information has been compromised. You can pull your credit reports for free each year at AnnualCreditReport.com or view your credit scores each month on Credit.com. Signs your identity was stolen include mysterious addresses, unexplained dips in your scores and new accounts you never signed up for.

More Money-Saving Reads:

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