Most of us use a credit card or debit card on a regular basis. Unfortunately, however, criminals are finding more and more sneaky ways to use this to their advantage and swindle us out of our hard-earned cash.
So to give you an idea of what you should be looking out for to protect yourself and your money, here are five of the worst card scams:
1) Visa credit card scam
Imagine this: The phone rings and the caller claims to be from Visa or Master Card - the caller will even quote a badge number to make it sound more convincing. The caller explains that your credit card has been flagged due to an unusual purchase pattern and you'll be asked if you bought a particular item from a certain company.
You haven't, so the caller will tell you that you'll be credited with the amount supposedly taken from your card. The caller will quote your billing address, adding even more credibility to the call. You'll then be told that a fraud investigation will be launched and you'll be given a free phone number to call as well as a case number.
Of course, this will all sound pretty genuine. So when you're then asked to provide the three digit code on the back of your card for verification purposes (confirming the card has not been lost or stolen), you might not think anything of it, and will simply hand it over.
But once you hand over that number, you can kiss goodbye to your money. When you next receive your statement, you'll find that the money has been charged to your card and there's no sign of it being credited back.
How to avoid it: Don't ever hand over any information about your card - if the caller is genuine, he/she will never ask for it. It's always a good idea to ask for the caller's information and then call the phone number on the back of your card and ask for him/her in the security department. You'll soon find out whether the caller really was who he said he was.
2) Card skimming
This is a well-known scam and may have already happened to you or someone you know. You go to use an ATM (automatic teller machine) and don't realise that a false front has been attached to the card reader - where you insert your card. This then captures your card number and transmits it wirelessly to someone waiting nearby.
A hidden camera will also be attached to the machine - perhaps in a leaflet holder - and this will capture your PIN as you enter it. Criminals will then be able to make a copy of your card and use it, along with the PIN, to withdraw funds and buy goods. So the next time you check your bank account, it's likely to be empty.
How to avoid it: Always check the ATM to see whether anything looks suspicious - if anything has been added or changed, either go to a different ATM or, if you're outside a bank, go inside to ask about the changes.
Always cover your PIN so that prying eyes won't be able to see - in some cases, the criminal may be standing close behind you rather than using a camera.
3) The envelope scam
You receive a call from someone claiming to be from the security or fraud department of your bank. You're told that there's been some fraudulent activity on your card or that there's a fault with your card. The caller tells you he/she can help resolve the problem.
You'll then be told to write down your PIN and place it in an envelope with your card. You'll be informed that a courier will be sent to collect it. The scammer hires a genuine courier to come and collect the envelope containing the card and PIN. The courier, of course, knows nothing about the scam and once the courier has collected the envelope, it will be passed over to the scammer. The scammer is then free to use the card and PIN to withdraw all the cash he/she wants.
Of course, you might think you won't fall for this - but when the person on the other end of the phone is scaring you into believing there's been some dodgy activity on your account, or that your card is faulty, you might find you feel differently.
How to avoid it: If you receive a call, hang up and call the organisation back on the official number. Never write down your PIN and never hand it or your card over to someone else.
4) Call-tag scam
Imagine this: You receive a phone call from someone claiming to be from a company that's sent out an item to you by mistake. The caller asks if he can pick up the goods once you've received them.
The caller then arranges for a different courier to pick them up - this is known as a 'call tag'.
Of course, the caller is not from this company at all and the goods do not belong to him. In fact, the caller has simply bought the goods himself using your credit card details, and then has ordered them to be re-shipped to his own address. By the time the unauthorised charge will appear on your credit card, you'll have sent the good merrily on their way.
Don't bother blaming the courier who comes to pick up the goods. Even though this courier was hired by the scammer, he wouldn't have realised he's taking part in a scam.
How to avoid it: If you receive a call like this, ask for a phone number to call back. Check out the company to make sure it exists. Finally, always check your credit card statement carefully.
5) Card not present fraud
This is another scam you've probably already come across. You're checking your bank statement one day when you come across a suspicious figure - an item you don't remember buying.
You phone your bank and discover you've been a victim of 'card not present' fraud. Someone has obtained your credit card details and used them to make a purchase online - perhaps a television or computer - without actually having the card to hand.
Luckily, nowadays, banks are getting better at spotting this kind of fraud and stopping it in its tracks.
How to avoid it: Always keep your receipts and shred them before throwing them out. Don't let anyone else use your credit card, and when purchasing goods online, always ensure the website displays a secure padlock logo. Finally, never let anyone else know your PIN and never write it down.
If you'd like to know more about fighting back against card fraud, read 12 ways to protect yourself from card fraud. And for even more advice, check out the Safe From Scams website.
Protect yourself from scammers using lovemoney.com
If you need help to protect yourself from fraud, or you've fallen victim to a scam, lovemoney.com members may be able to help you. Why not ask a question on Q&A where lovemoney.com members can give you advice on what worked best for them?
Or watch our videos: The biggest financial rip-offs and Watch out for this debt rip-off to find out more about scams and swindles to avoid.
Finally, if you know of any scams yourself, please share them using the comments box below. That way, other lovemoney.com readers can benefit from the knowledge you share.