Credit Card Scams and Ripoffs

What Are Your Top 10 Credit Card Scams?These scams are real ripoffs.

Well, you may not have all 10, but here are mine…I’ve been had by all these schemers…and it’s got nothing to do with being naive. You may want to go check your credit statements, credit bureaus, law enforcement and those people closest to Your Money!!! 

Let’s begin:

1) Finding you have more credit cards than you realized and the applicant was someone from your address!

13 years ago I had knew I had 4 very important credit cards which I used regularly  – mostly for business. But one day, I had strange calls from a bunch of collection agencies because I was home from a business trip. And there were documents showing I was an R9 on 9 credit cards!!! Huh??? All maxed out and I didn’t know? How come there wasn’t even a single credit check on those cards during application?

Start finding the source of the problems very close to home. The one that’s closest to your money and credit information. Divorce proceedings were also promptly slapped on my face a few weeks later. Guess who the culprit was.

2) Banks’ own “Collections” reinstated paid off debts.

Never trust a bank when it comes to money. The above credit cards debts, some of which were paid off by negotiating a lower value because of excessively high interest rates. After being “paid in full” on their records, 2 large banks decided to “reinstate” the debts 2 years later without telling me. They only notified the credit bureau about 4 years after the debts had been fully paid!!! They knew that was the time I was searching for a mortgage and would pay up or be tied in court for at least another several years. In fact, it required a bank officer from another bank to intercede the payments as these 2 banks were insisting on holding on to the debts despite my trying to “settle” in full. This time, ’my’ bank officer acted as a notary, ensuring these jerks can’t pull off that fast one again. It still cost me another $6,700!

3) Double billing your credit card and charging interestand fees for it.

You may have heard of this one. They invariably choose a credit card that’s at or near the borrowing limit. Then one day you find you have some ‘errors’ in your statement. You’re not sure, but you did withdraw via ATM some cash. You find one receipt but they insisted 2 times. You find the customer service if really a broken record with a human body who is trained to get you mad so that they can just hang up.

When you are at that stage of borrowing, you pay higher interest, you pay over limit fees, and perhaps an overcharge fee for extra credit. And if you withhold payment, they get you for withholding legitimate dues and then destroy your credit rating. So, you pay while you spend over a hundred hours trying to get the right person to sort that out. If you’re lucky and the ombudsman listens to your story, you get a full refund, without any apologies, nor interest due! I did that 6 times already some years ago.

The credit card company at last said this was a rare mistake. But by rare did they mean 20% or more of their customers get that royal treatment?

4) Foreign Airport Bait and Switch.

BEWARE! You could spend some time in jail for this! You buy something or pay for a meal or even a duty free store at the departure…you’re leaving. Then inexplicably, you’re being manhandled by cops with batons and guns. Battered and bruised in jail, you hear that you have used a fake credit card and was shop lifting. Now, they get you as you are leaving because no one is likely looking for you from that country – you’re leaving right? They (cops) will try to extort money transfers from you – as much as they can muster – and share it amongst themselves. By then you may have been in jail for a week or more. And to rub salt into the wound, you are blacklisted and ordered out of the country for fraud/theft. Think this can’t happen? A cousin and an uncle suffered this fate – one in Thailand, the other in Indonesia. They know how to pick their victims. Lately, there have been hundreds of such complaints – even from North Americans who have been there.

5) The number reversal.

I paid for a bicycle costing $149.00 with a credit card. The next month, the bill came to $194.00! I happened to check the receipts and credit card copy (usually lost right?). True enough, I was right and called the bike store at once to correct the error. But their records showed $194.00! I pursued the matter with the credit card company (thankfully this agent was very sharp), which asked for the original bill of the credit card. It was altered. So, someone was trying to make off with a $45.00 tip.

6) Credit Card Convenience Checks are NOT!

Never use them if at all possible! First of all, they can negatively impact your credit rating. At the very least, it takes you down a good number of valuable points. Second, these are deceptively insidious…look at the terms and conditions carefully…they usually add 2-3% on top of your borrowed amount or even your current oustanding balance, and you are lured into it with a very low interest rate of perhaps 5% or less! That’s a trap! You could be paying a total interest rate of up to 41%! Thirdly, did I mention your credit rating takes a hit? So anything you borrow after carries a much higher interest rate. Fourth, did you know that after the grace period offered, you pay the full “NEW” rate – e.g. you paid 10.5% on your old card, the new convenience rate was 5%. They both can expire and you could pay 19% or more!!! So, don’t fall for “convenience” without finding out more about it.

7) Allowing fake billing.

Some very aggressive credit card companies will allow automatic annual billing, even after you have cancelled the subscription – are that few extra dollars of charged interest worth the customers’ anger? Other credit card companies are more careful here and confirm with the customer before allowing such annual renewals. Too often, false billing is allowed. Many annual subscriptions are fake and the unscrupilous companies and individuals try to take advantage of this fact – who can remember them anyway after a year or two of not wanting to have anything to do with them? Be vigilant!

8) Charged for overpayment.

This is one for the ombudsman – never the courts if you can help it. I once had the habbit of overpaying my very active credit card a few years ago – simply because I knew I would be using the card directly after the current statement. Also, I often did this to “raise the credit spending limit” by topping up and overpaying - as suggested by a bank officer as I often travelled (one runs out of credit pretty fast overseas). Then, after a couple of years, I did an audit on my credit card charges…I simply called the ombudsman to lodge a complaint. That creditd card company was charging me a processing fee each time I overpaid – even if it was only a few dollars, I was on the hook for $25 minimum or 3%, whichever is higher. Then, on top of that, I was charged a processing fee under “extra service”. Extra service for what? I did get a refund for most of the charges from the bank. And my credit card was changed to another version which they assured me was “different” and catered to travellers…yeah right. Records of the previous card version was changed to the new one therefore older records are no longer tracked. How convenient for the bank’s “oversights”.

9) Prepaid Credit Cards rates are through the roof!

OK, you need to purchase that new dress or perhaps need it to get into a new nightclub. So you buy a $200.00 prepaid from a department store costing an extra $20 in fees. So far, so good. You use $100.00 over the weekend and keep the balance for later – perhaps some school books? You’re being responsible right? A few months later you find that the credit card had expired at the bookstore checkout! On the back in almost microprint the store clerk pointed out your card expired in 60 days after purchase with no refunds. No big deal? Yes, it is a huge deal. You see, if you had used it to the full, the rate would have been 60% per annum!!! But as it was, you paid 220% simply because it expired on you in 2 months (adding the $100 lost as a charge). So, if you use one of these prepaid debit cards – store version or credit card names, the same issues apply. Be EXTREMELY careful of the fine print! The example given happened to a student I knew.

10) Internet Spying On Credit Card Transactions.

So you make a purchase online through a “https” designated site. All is encrypted and secure right? That’s total bull s*** You see, if you use any kind of through air transmission, if someone with the right software is scanning on a wireless transmission is quite able to find your internet link and actually “SEE” and record your transactions, your pass codes, your internet logins , and this includes your credit card numbers and personal data. But let me qualify this… hard wired lines are a little more secure in this case. But not totally secure! The same thing can happen if these sophisticated crooks find your internet link – your computer IP. The most common use of such data is simply getting your money but the more sophisticated will use your credit information and get loans, buy homes or even vehicles and all manner of luxury travel. Imagine finding out one day that you’ve been declared a bankrupt without ever knowing about it until it is too late.

If you think this is not possible, remember that police, the internet service provider and other agencies routinely tap and spy on your use of the internet. The crooks are often even more sophisticated than these guys put together.