Frauds and Scams That Affect Your Credit

In this day and age of never ending credit, the convenience of having your own credit card, and the ho-hum attitude of people who just plop down their plastic pal, we have become blasé about the importance of protecting ourselves.  Signing into a secure server and giving your personal credit information on the internet is something done daily by thousands of people with little thought, some with dire consequences and others with no consequence at all. Here, we will discuss frauds and scams that are perpetrated against unsuspecting consumers.

Some facts on credit fraud

According to Celent Communications, an international strategy consultancy, credit fraud online alone this year will be 3.2 billion dollars.  In 2006, it stood at 3 billion. MasterCard International reports that credit fraud has risen by 369% since 1995.  It is the one crime that is hardest to combat.

How does it affect you?

If your credit information is stolen, criminals use your identity to buy goods and services.  This results in more expensive credit terms, and higher interest rates, even if your accounts are untouched by fraud.  The downside of this is criminals find a successful scam and continue to cheat other unsuspecting consumers.

How are these scams run?

Crooks are very resourceful when it comes to stealing identity.  Here are some examples.

            * Slick crooks practice "shoulder surfing".  It is called this because an expert con man can look over your shoulder when you input credit information when making a purchase.  They are very adept at this.

            * The carbon copy from credit cards forms is rarely used today.  If it is, be sure to get the carbon copy from the retailer.  Unscrupulous clerks have been known to take this information and gain access to your credit.

            * One of the biggest types of credit fraud is run through telemarketing. Fake check scams rate the highest.  People are sent a bogus check for work done or items sold, and are asked to send money back to the originator.  It accounted for 31% of all claims January-December 2006.  Average loss was 3,278.00.  Another high visibility scam is the advance fee loan.  In this scam, you are offered a loan even if your credit is bad.  Of course, a fee applies.  The crook takes your fee and disappears.  It ranked at 6% of complaints from January-December of 2006. 26% of complaints for this same time period were for sweepstakes prizes.  You send in a fee for a prize you supposedly won.  It never materializes.  The average cost was $2,740.00.  It is noteworthy that the largest group of the population to be scammed in this manner was the elderly.  The average for persons 60 - 80 years of age is 33%.

The scope of this article cannot list all the scams being run today.  Further research by the consumer can be accomplished through the use of the internet, using "frauds and scams that affect your credit" as the root keyword.

How do I protect myself from credit fraud?

Here is a list of things you can do to protect your credit:

            * Never throw away ATM receipts, credit statements, credit cards, bank statements or any thing that has your personal or credit card information on it.  Save yourself a lot of worry and buy yourself a cheap shredder.  It is well worth the cost.

            * Never give your credit card company or social security number out over the phone unless you place the call.

            * Look for discrepancies in your bank statement each month.  Always reconcile your account monthly.  Use online banking to keep a running tab on bank activities.

            * Always keep a list of credit card numbers to call incase of theft or identified unauthorized purchases.  Always report the loss immediately.  Remember, the Federal Trade Commission (FTC) states your liability for unauthorized charges is limited to $50. Don't fall for the numerable credit card insurance plans.

            * If you find someone has assumed your credit, ask the credit bureaus to print a statement to that effect in your credit report.

            * Always review a copy of your credit report yearly. Be sure to notify the credit bureaus of any suspicious activity and be sure to follow through until these entries are either removed or explained.

Because credit is such a fragile thing, keeping track of your credit record is essential now more than it has ever been.  New scams arise daily.  Stay informed and educated, and maintain a close vigil on your credit.  Follow these simple guidelines to protect yourself.