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Just because the economy is down doesn’t mean that criminals are not finding plenty of opportunities. 2011 has seen it’s fair share of credit card scams. Also, cards that are otherwise legitimate may as well be scams.
Let’s take a look at some of the scams that have happened this year and some of the awful cards that have surfaced.
1. The Brothers Scam
Adam and Sam Battani plead guilty earlier this year to charges involving this scam. The men used unauthorized credit cards to scam Nevada merchants and banks, netting them over $5 million. The scam took place between 2002 and 2010.
The scammers were very busy with fraudulent documents and credit cards. As part of their plea deal, they were to surrender , among other items, 50 counterfeit driver’s licenses, 24 Social Security cards, and 44 unauthorized credit cards. Overall, it was a highly organized scheme as they were able to continue it for 8 years before being busted.
2. The Prison Scam
Dimorio McDowell ran a credit card scam that fooled credit card companies, their customers, and store employees. He conned information out of both card holders and the credit card companies until he had enough to have his friends added as approved users or even swap their identities with legitimate customers.
After obtaining the fraudulent credit cards, McDowell’s friends then went on shopping sprees and sold the goods at a local gas station. This ultimately became a $1 million credit card scam before it was busted. What was amazing about all of this is that McDowell’s friends were in Ohio and he was in a prison cell in New Jersey. More on this scam can be found here.
3. The Sierra Madre Scam
This story hit late in December of 2010 and continued into January of 2011. Sierra Madre, a relatively small town in Southern California, was hit with a string of credit card fraud cases. All involved a single gas station and the victims quickly mounted to nearly 400. Nearly $100,000 in losses were reported and, after an investigation, multiple skimming devices, which steal a customers information, were found.
With few people who use skimming devices actually being apprehended, the chances of ever finding out who did this were slim.
However, a major clue was that the gas station owner closed it down and left town just after the fraudulent transactions took place. It is not clear where the alleged scammer fled to.
4. The First Premier MasterCard
Alright, this one is not an outright scam. It is more of a rip off – kind of like the guy selling roses for ridiculously expensive prices on Valentine’s Day.
- 59.99 percent APR
- $45 for a 1 time processing fee
- $30 fee for the first year
- $45 annual fee for all years thereafter
- Monthly service fees of $6.25 after the first year
- Initial credit limit of $300
Now, this card is tailored to those with poor credit. I doubt Vegas has odds on this – but I’d probably bet against users of this card building up great credit any time soon.
Also, as a side note, the second worst card out there is the Centennial Gold card, which has the same statistics as those listed. Not surprisingly, it shares the same issuer.
What You Can Do
What can you do not to be a victim?
Well, in some cases, not much. After all, some of these scams happened without your involvement at all.
So the the best advice we can give you is to be forever vigilant. Track your credit report. Look out for new credit being opened in your name. Make sure someone is picking up your mail when you are out of town. Use a shredder. Use unique passwords.