Consumer Protection Fact Sheet - Credit Card Offers

Fraudulent credit card offers often target people who are having credit problems and have not been able to get cards elsewhere. They may promise to get you a card, but legitimate credit card issuers generally do not do business with people who have bad credit histories.

Do not fall for promises that you will get a credit card even if you have bad credit.

Do not pay upfront.

It is against the law for telemarketers to charge any fees in advance if they guarantee or claim that it is likely that they can help you get a credit card. This does not apply to banks. If there is an application or processing fee, it should be very small, not the hundreds of dollars that con artists request. Any annual fee usually appears on your first credit card statement.

If your credit history is bad, your best bet is to get a “secured” credit card.

This requires you to place a deposit in an account at the issuing bank equal to your credit limit. If you do not pay your bill, the bank will use your deposit to cover it. You may not get interest on the account, but it is a good way to start rebuilding your credit.

A “gold” or “silver” card may not be what you think.

Sometimes fraudulent credit card offers promise “gold” or “silver” cards from major card issuers. What you receive – if you get anything at all – is a gold or silver-colored charge card that can only be used to buy overpriced goods from the company.

Apply for credit cards directly from the issuers.

It is not necessary to pay another company to help you get a credit card, nor will it improve your chances of obtaining one.

If you have credit problems, get counseling.

Fraudulent credit card companies may also claim that they can repair your bad credit for a large upfront fee. But you can correct inaccurate information in your credit files yourself for free, and no one can erase negative information that is accurate. Your local Consumer Credit Counseling Service (CCCS) can provide advice about how to build a good credit record. CCCS may also be able to make payment plans with your creditors if you have fallen behind. These services are offered for free or at a very low cost. To find the nearest CCCS office, call toll-free, 800-388-2227, or go to www.nfcc.org.

Protecting your cards

If your credit card is lost or stolen, it can certainly be inconvenient. But beware of crooks that use scare tactics and false information to sell protection that consumers do not need.

Worthless offers

Worthless credit card loss protection offers are popular among fraudulent promoters who are trying to exploit unsure consumers. Avoid doing business with callers who claim that:

  • You are liable for more than $50 in unauthorized charges on your credit card account.

  • You need credit card loss protection because computer hackers can access your credit card number and charge thousands of dollars to your account.

  • A computer bug could make it easy for thieves to place unauthorized charges on your credit card account.

  • They are from “the security department” and want to activate the protection feature on your credit card.

Telephone scam artists are lying to get people to buy worthless credit card loss protection and insurance programs. If you did not authorize a charge, do not pay it. Follow your credit card issuer’s procedures for disputing charges you have not authorized. Your liability for unauthorized charges is limited to $50.

Your credit card issuer may offer extra protection for free

Most card issuers have voluntary policies to remove unauthorized charges completely if consumers report them as soon as they discover them. Ask if you are not sure what your issuer’s policy is.

Credit card loss

Your maximum liability under federal law for unauthorized use of your credit card is $50. If you report the loss before your credit cards are used, the Fair Credit Billing Act (FCBA) says the card issuer cannot hold you responsible for any unauthorized charges. If unauthorized charges occur on your cards before you report them missing, the most you will owe is $50 per card.

Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.

After the loss, review your billing statements carefully. If they show any unauthorized charges, it is best to send a letter to the card issuer describing each questionable charge.

Again, tell the card issuer the date your card was lost or stolen, or when you first noticed unauthorized charges, and when you first reported the problem to them. Be sure to send the letter to the address provided for billing errors. Do not send it with a payment or to the address where you send your payments unless you are directed to do so.

Watch out for impostors.

Someone may claim to be connected with your credit card issuer and ask to “verify” your account number to make sure you are protected. Your real credit card issuer does not need your account number; it already has it.