Protecting yourself

FTC study highlights credit card fraud

Jeremy Simon

According to a recently released survey from the Federal Trade Commission, 13.5 percent of the adult U.S. population fell victim to fraud in 2005. Of the 30.2 million Americans that got scammed, credit cards were the payment method in 37 percent of all cases, making plastic “the most commonly used method of payment for fraudulent transactions.”

For 3.2 million consumers, “free” trial memberships in buyers clubs were anything but. In these schemes, telemarketers would offer a free membership in a buyer’s club gratis as a “thank you” to consumers who had just made a purchase over the phone. One crucial point was often not made clear by the telemarketer, however — that the consumer’s credit card would automatically begin being charged for the membership cost once the free trial period ended.

Not all of the scams that targeted cardholders necessarily involved paying by credit card. Credit card insurance fraud plagued 2.1 million consumers, who (in an ironic twist) had paid for insurance supposedly designed to prevent misuse of a lost or stolen credit card. Meanwhile, 1.7 million Americans became victims of advance-fee loan fraud, in which consumers made a payment in order to secure a guaranteed loan or credit card which was ultimately never delivered.

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  • Paul

    I found in 2008 there was a 34 day billing MONTH that was 5/13/2008.