Area cops warning residents about credit card interest rate scams

Two area police services are warning people of the latest scams and they have to do with interest rates.

OPP Constable Mark Cloes reported the OPP are warning consumers not to blindly trust phone calls that claim to be able to negotiate significantly lower interest rates on credit cards or loans. Members of the OPP Anti-Rackets Branch say that type of “service scam” is becoming more prominent during the tough economic times experienced by many Canadians.

Cloes said consumers who get those interest rate reduction offers – sometimes through automatically-dialled “robo-calls” – should listen to them with extreme scepticism because many are scams. What the callers really want is the processing fee, which is usually paid by credit card.

Cloes said some even follow-up with a fraudulent client acknowledgement or cancellation clause that reimburse the amount, excluding a retainer fee.

In 2011, the Canadian Anti-Fraud Centre received 982 Canadian complaints of criminals who offered lower interest rates either online or over the phone to in return for some type of fee. Of those, 173 people were identified as victims who reported a loss of more than $133,000.

Cloes said there are likely many more victims, but they are reluctant to report the crime.

 Guelph Constable Michael Gatto said the Guelph Police Fraud Unit is also aware of the scam and is warning people to be careful when dealing with people who contact them.

He said callers representing themselves as belonging to Visa or Mastercard and discuss with homeowners how they can “lower your credit card interest rates.”

Gatto said there is a sales pitch about lower interest rates and the caller then tries to obtain the homeowner’s credit card number and the security code on the back of your credit card.

He warned “Do not give your credit card numbers or personal information over the phone unless you initiated the call to a reputable organization and you feel comfortable providing your details for a credit card purchase. Giving out this information to someone who has called your home will likely result in unauthorized transactions occurring on the credit card you provided.

Gatto added, “You must first take steps to be sure you are giving your credit card number to a legitimate company – you can’t confirm this without hanging up and checking into things further.”

Cloes said, “It is important to note, companies behind those calls cannot do anything for you that you can’t do for yourself – for free. Indeed, investigators found that people who pay for those services don’t get the touted interest rate reductions, don’t save the promised amounts, don’t pay off their credit card debt three to five times faster, and struggle to get refunds.”

He said people looking to reduce interest rates should call their financial institution or the customer service phone number on the back of your credit card and negotiate.

“And, if you are tempted by the promises made in a rate reduction ‘robo-call’, hold off – and hang up,” he added.

 He said police suggest anyone who suspects they, or someone they know has experienced an interest rate reduction scam or has been the victim of a service scam, to contact their local police service or Crime Stoppers at 1-800-222-8477 (TIPS).

Gatto added, “If you have given out your credit card number and security code to someone that phoned your residence about lower interest rates – please contact your credit card company immediately to cancel your card and have a new one re-issued.”