Credit card scam

Beware of this New Credit Card Scam!

I groggily answered the ringing phone at 6am, and was alarmed to hear an official-sounding robotic voice telling me that there were two suspicious charges to my Visa card. It went on to describe the charges, which were in the hundreds of dollars. Press 1 to accept these charges, press 2 to reject them and be connected to a customer service representative. Find out what to do instead, so you don’t fall prey to this new credit card scam.

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How this Scam Works

  1. They time their calls for the wee hours of the morning. My call was about 6am. Others report having calls anywhere between 5am and 7:30. The hope of the scammers is that because you are groggy and half asleep, your guard will be down. That can make you more vulnerable to fall for their scam.
  2. The call sounds official, coming from your bank or credit card company. In my case, it was a robot voice, which sounded exactly like when you call the bank and get their robotic system before connecting to a human. This was high quality!
  3. The call states that unauthorized charges have already been made to your credit card account. (This is a lie! No charges have been made to your credit card.) The robot describes the charges, including the amount, which is in the hundreds of dollars. The fraudulent charges are high enough to be alarming.
  4. The call then gives you the choice to accept the charges by pressing 1, or preventing the charges, by pressing 2. Naturally everyone will press 2, because these charges don’t exist!
  5. At that point, you are connected to a person, who will “help” you. This is where they start phishing for information. In my case, I hung up because I was exhausted, and I’d already declared the charges were not valid. I did not yet realize I was being scammed, but I decided to phone back later in the day.
  6. Reports describe how the fake credit card representative will then ask you which bank your credit card is for. They then ask you if the card starts with the following 4 numbers. Yes it does! That’s because all credit cards from that bank start with those four digits!
  7. Now that you’re comfortable that the bank is “legit”, they ask you for the remaining digits in your credit card, to confirm with their system. THIS IS YOU GIVING THE SCAMMERS YOUR CREDIT CARD NUMBER! Presumably they then ask you to give them the expiry date and possibly the PIN on the back of the card.
  8. The credit card scammers now have all the information they need to place fraudulent charges on your credit card.
Worried woman on the phone - credit card scam
Source: Photo by Karolina Grabowska from Pexels

How this Scam can get Worse!

There are a few different ways this credit card scam can get worse, according to a recent article from Greedyrates.

Call-Back Request: The scammers may ask you to hang up and call the bank’s 1-800 number on the back of your credit card to prove the call is legitimate. However, they don’t hang up the phone, and instead play a dial tone sound. So you think you’re calling the bank, but you get the same scammer when they “answer”. At this point, they may ask you to transfer your funds to a “safe” account while they investigate. Now they have your bank account funds AND your credit card number!

Transaction Review Request: The “investigator” asks you to give remote access of your computer to them so they can “review suspicious transactions”. Now they have access to anything on your computer, including your online banking, AND your credit card number!

Bank Investigator: The scammer asks you to “help” them catch the criminal, sometimes described as a dishonest employee, by accepting a deposit and then transferring it back to them. The deposit, however, is fake, so you end up transferring your own funds to them. Now they have your bank account funds AND your credit card number!

Components of a Credit Card Number

This section is just for those who are interested in diving into the rabbit hole of learning about credit card numbers. If you’re not that interested, feel free to skip ahead to the next section!

The first digit of your credit card number is the Major Industry Identifier (MII). For example, an MII of 4 indicates a Visa card. AMEX starts with 3, Mastercard starts with 5, Discover Card starts with 6.

Digits 1-6 are called the Issuer Identification Number (IIN) or Bank Identification Number (BIN). It indicates the bank that issues the card, whether it’s a business or personal card, what region or country it was issued in, etc. For example, 4520-34 indicate this is a TD Canada Trust Visa card, issued in Canada. For banks with more than one IIN, cards of the same type and same region will generally have the same IIN. (See more at Credit Card Validator and Credit Card Review.)

Digits 7-15 are your Primary Account Number (PAN), and are unique to your account.

BMO Air Miles Mastercard

Digit 16 is the last number on most credit cards. This is the check digit, that allows for easy verification of the number. It helps to detect typos, or transposing digits. That is, entering “1324” instead of “1234” for part of your credit card number. If you want to go down an even deeper rabbit hole, you can read more about the Luhn Algorithm for credit card validation.

The credit card scam people know the IINs for all the banks. They say they’re calling about a Visa card, and then you confirm that you do have a TD Canada Trust Visa. So when they say, “I’m confirming that your card starts with 4520”, you will confirm that it is, in fact, your card.

How Long has this Credit Card Scam been Around?

A July 2020 article from Greedyrates reports “RCMP Warns of New Credit Card Scam”

However, I found a report from the CBC in January 2015 in an article called “New credit card phishing scam hits Canada”. In the article, a call-taker from the anti-fraud department states that this phishing scam has been “quite successful”.

While it may have been around for a few years, this is the first I have heard of it. It certainly seems less common than the Canada Revenue Agency scam, which I get weekly. Or people wanting to clean my air ducts – we don’t even have air ducts, as our old house has hot water radiator heating.

Is Fraud a Big Problem in Canada?

The best source of information on this is the Government of Canada’s Anti-Fraud Centre.

In the first 9 months of 2020, almost 40,000 Canadians reported fraud attempts. There were more than 18,500 victims of fraud, who lost more than $67 million!

That works out to an average loss of over $3,600 per victim in the first 9 months of 2020. Looking at 2019 numbers, nearly 20,000 Canadians lost over $102 million. That’s an average loss of over $5,000 each!

Clearly fraud is a profitable business for the crooks. And victims are losing substantial amounts of money, which can be life changing.

How to Prevent Becoming a Victim of Credit Card Scams or Other Fraud

There are many things you can do to prevent becoming a victim of fraud:

  • Don’t be afraid to say “NO”, or to hang up on a call
  • Do your research, verify the organisation is legitimate
  • Be wary of plays on your emotion – “Gran, it’s me! I’ve been in an accident and I need money quickly!”
  • Don’t give out personal information, especially on unsolicited calls
  • Don’t carry unnecessary ID or credit cards in your purse or wallet – this minimizes how much a thief can steal
  • Never leave your purse or wallet unattended in a public place (including work, shopping carts, parties, restaurants, and church); never leave your purse or wallet in view in your car, even if it’s locked
  • Use a shredder to destroy mail with personal information such as your credit card statements, including pre-approved credit card offers that you do not want
  • Be wary of upfront fees – there are NO prize fees or taxes in Canada
  • Protect your computer: watch out for spoofed emails; be careful when clicking on attachments or links; never click on urgent-looking messages that pop up while you’re browsing online; never give strangers remote access to your computer
  • Be careful who you share images with; disconnect or cover your webcam when you are not using it (hackers can get remote access and record you)
  • Know who you’re dealing with
  • Watch for anomalies in your finances or credit score and report immediately
  • For businesses, limit your employees’ authority by only allowing a small number of staff to approve purchases and pay bills

If you don’t already track your credit score, you can do that for free with Borrowell! Your credit report can alert you to any fraud or identity theft if someone takes out a loan or a credit card in your name.

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Sources: TransUnion, The Canadian Anti-Fraud Centre

What to do if you Think you are a Victim of Fraud

Please know that you are not alone. Remember that there were nearly 20,000 victims of fraud in 2019, and it looks like we’re on track for even more in 2020.

Fraud can go unreported because victims are embarrassed. By reporting the fraud you are helping the authorities to catch the perpetrators. And you can prevent someone else from becoming a victim.

The most important first step is to remain calm. Of course it’s natural to be upset! But a clear head right now is important.

Start with gathering any evidence: documents, receipts, bank statements, copies of emails or text messages if applicable.

Next, contact your financial institutions. The phone numbers are on the back of your credit and debit cards, and your bank statements. Ask them to place flags on all of your accounts. Then change all your banking passwords.

Report the fraud to both credit bureaus, Equifax and TransUnion.

Contact your local police. Remember that 911 is for emergencies only, but there will be a local phone number you can call. Also report the fraud to the Canadian Anti-Fraud Centre toll free at 1-888-495-8501 or through the Fraud Reporting System.

If your government issued ID has been stolen, contact the appropriate level of government in your province or territory:

  • National government issued ID includes: passport, immigration documents, social insurance number
  • Provincial government issued ID includes: driver’s licence, health card, birth certificate

Protect yourself from future fraud. Once you have been a victim, you may be targeted again. Sign up for free with Borrowell to track your credit report, which can alert you if someone tries to take out credit in your name.

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Did I Become a Victim to this 6am Credit Card Scam?

The phone call woke me up at 6am. The professional-sounding robotic voice said two charges had been made to my Visa. It described them, then asked me to press 1 to approve the charges or 2 to decline them. Of course I pressed 2. It then said it was transferring me to a Visa representative who would help me.

At this point, I was so tired I didn’t think I could speak to someone, and I had already indicated they should decline the charges. So I hung up.

At no point did I think this call was fraudulent!

Later in the day, I phoned the number on the back of my Visa cards. (I have business Visas at two different banks for companies I work for. We use Mastercard and Amex for our personal cards.)

The first Visa rep recited the most recent purchases, which were legitimate.

So I called the second Visa number. This rep said, “We’re getting a lot of calls about early morning credit card scams!” There were no suspicious charges on this card either.

Thankfully, I unwittingly did the right thing! I hung up on the scam call, and phoned my bank using the number on the back of the card.

I did NOT become the next victim of a credit card scam.

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