Credit Card Scam Alert: Ignore that offer from AmTrade International Bank

There is a new scam showing up in mailboxes.

It takes the form of an offer for a “secure” credit card, and it targets people with low credit scores or other financial issues.

A “secure” credit card is a credit card where the cardholder puts up some of their own money as collateral against the credit line. It allows lenders to extend credit to higher-risk consumers at a lower annual percentage rate, and can actually be a good tool for rebuilding credit (timely payment of debts makes up a large portion of your credit score). We actually offer a secured credit card here at REGIONAL. They’re a legitimate financial tool.

Except for when they’re used as the basis for a scam.

This one comes from AmTrade International Bank, with an implied connection to Credit One Bank, N.A. (there is none). Victims select a card with either a $1,500 or $3,600 credit limit, and then send in $500 or $900 (respectively) as “collateral” for the credit lines.

And the credit cards never arrive. At its core, this is the simplest form of scam: take money, disappear.

This exact same scam showed up earlier in the year, from Freedom 1st National Bank, which also implied a link to Credit One. In both cases, victims instantly found themselves robbed of either $500 or $900.

If you get offers for pre-approved credit cards in the mail, it is vital to verify all claims before making a purchase decision and sending personal information and money.

In fact, I’ll just put it out there now: don’t respond to unsolicited pre-approved offers for “secure” credit cards, at all.

Also, never just send money to an unknown entity, for any reason.

This scam is going to keep popping up, with different fake banks running it each time, and law enforcement is going be playing whack-a-mole for quite some time. In the meantime, it’s on each of us to look out for ourselves.

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So what’s the deal with RFID chips in plastic cards?

You may have seen news reports or read articles online about credit and debit cards that contain RFID (Radio Frequency Identification) chips. These devices are used to make it possible to use a card without swiping it through a reader (those Speedpass things at the gas station use this technology).

However, according to some sources, it’s possible for thieves to use electronic devices to steal the information on these chips without your consent, by simply passing close enough to your wallet to be within range. On one hand, retailers who sell aluminum wallets would have you believe that the only way to protect yourself is to purchase their wares. But they sort of have a vested interest in making you believe that, right?

On the other hand, an actual occurrence of thieves using this method to access credit or debit cards has never been reported. On the other other hand (we’re up to three hands, if you’re keeping track), if someone’s information was stolen through a handheld RFID reader, they wouldn’t really have a way to pinpoint it as the way their information was compromised. After all, tons of fraud and identity theft victims simply have no idea how the crime occurred.

Here’s something that might make you feel safer, though: one piece of information RFID chips don’t transmit is the verification code (the three digits on the back of the card). Without this, the rest of the information transmitted would be of very little use to a thief. Some businesses may allow a transaction without this information, but most do not. Also, newer RFID chips aren’t readable except from very close up, and many are encrypted as well.

But here’s a fairly foolproof way to be safe: carry more than one RFID chip-enabled card. Together they create a jumble of information that is utterly worthless to thieves. Alternatively, you could just carry no cards at all, but let’s face it: these days, that may not be the most convenient option.

Or I suppose you could buy one of those aluminum wallets. Some of them at least look sort of cool. If you’re on a budget, you could just wrap all your cards in aluminum foil, but you might get people asking you where your tinfoil hat is.

Staying in a hotel? Don’t fall for this credit card scam.

The rules still apply when you’re cardscam-psychtraveling: don’t give out personal or financial information to anyone unless you initiated contact and know who they are, why they need it and what they’re going to do with it.

A telephone scam that attempts to steal credit card information from hotel guests has resurfaced in Alaska. The potential victim will receive a call on the phone in their hotel room. The caller claims to be an employee of the hotel, and tells the victim there was a problem processing their credit card, then attempts to get the victim to reveal credit card information over the phone.

If you receive such a call, hang up and contact the hotel desk directly and ask about the call. In almost every case, the front desk will tell you they didn’t place the call.

Credit card fee scams.

I haven’t encountered any anecdotes of this scam “in the wild,” but I’m sure it’s happening somewhere.

You may have noticed it’s a bit tricky to get a credit card lately. That’s because everybody went nuts for a few years—lenders were putting plastic into literally every hand that reached for it, and consumers spent, spent, spent like…I won’t say “drunken sailors” because that would be offensive to drunken sailors. It was way worse than that.

Anyway, this whole mess came crashing down on our collective head a couple years ago, and lenders stopped lending irresponsibly. Actually, some of them nearly stopped lending altogether, which was yet another rookie mistake, in my opinion.

At any rate, since there’s nothing that can’t be turned into a scam, the following scenario emerged.

You get an offer for a credit card with a high spending limit, even though your credit score is lower than your shoe size. However, you have to pay a processing fee up front, usually around $100. You send in your payment, and the card never arrives. It’s an incredibly simple scam: promise something, collect payment, never deliver.

By the way, in applying for this card, you’ve also just given your personal information to people (you will soon realize) you can’t trust. Bad scene.

Now, there are legitimate credit cards with annual fees. However, none of them ever require you to pay in advance of getting the card. Don’t fall for this setup.

Besides, if you’re already in credit trouble, what you don’t need is a new credit card with a $7,500 limit. Even if the offer was real, which it’s not, you’d be inviting more trouble into your life.

I heard about this scam from It looks like an informative site, although I haven’t looked around too much on it yet. Check it out, you might find something interesting.

Walmart Gift Card Scam: This one is for real.

Last week, I wrote about false reports of the Walmart Cash Back Scam, and how these hysterical emails are nothing to worry about.

A lot of people have been getting these messages, apparently—that article has brought in a lot of traffic to this site. I hope that means people are relaxing a little, rather than being nasty to Walmart cashiers because they let an email hoax frighten them.

However, I just heard about a new one that involves Walmart and is real—thieves are calling victims with news that they’ve won a $200 gift card from Walmart if they only pay $1 for shipping. The victim reveals their credit card information, and you know what happens next.

(In case you don’t: the card never arrives because it’s a scam. The crooks weren’t from Walmart at all. They just take the victim’s credit card information and use it to make purchases or get cash advances).

If somebody tells you you’ve won something, never pay in advance. Walmart doesn’t just give gift cards away, anyway.

The full story is over at The Money Coach’s Blog. It goes into a little more detail.

Gone Vishin’

It’s 9:30 at night when the phone rings.

The Caller ID displays “Card Services” and a toll-free number.

You pick up the phone, and an automated voice informs you that “your card has been compromised.” It gives you a phone number to call to take care of the issue. The phone number is the same number on the Caller ID display.

Now…what should you do?

If you answered, “hang up and ignore the call,” you’re right.

Currently, there is a move towards integrating older technologies with the Internet. Eventually, I believe these technologies will be fully integrated; your television signal, Internet connection and telephone service will all be traveling along the exact same lines as part of the same service. These different technologies will also become more “seamless” over time—there will be less of a distinct divide between how you use your TV and your computer, and between the content you will receive from both. Okay, you’ll probably still use your phone to call Mom, but the signal will be digital, and it will be traveling through the Internet.

However, there is a downside, at least for the time being: vishing. Using Internet telephone services (Voice over Internet Protocol, or VoIP), criminals are able to spoof Caller ID information, to make a phone call appear to be from a trusted entity such as a financial institution or credit card issuer.

Let’s face it, you’re more likely to believe a call from “Card Services” than you are a “Blocked Call” or “Unknown Caller.” And that’s the basis of how Vishing works.

What happens if you call the number as instructed? You will be instructed to enter your credit or debit card number, expiration date, PIN and other security information. This is pretty much everything a crook needs to use your card for fraudulent purposes. They might also attempt to get your personal information, such as date of birth or Social Security number—basically, everything they would need to commit identity theft.