Exploring Credit Card Rewards Scams and How to Avoid Them?

Using a credit card brings convenience and many benefits, including bank-provided discounts, offers, and credit card reward points. Even if you are able to get money out of these credit card reward points, you should always be on alert for fraudsters who might try to trick you by pretending to give you more points or help you use the remaining ones.

Banks have now issued a warning to their clients, emphasising how important it is to stay alert against these dishonest scamming techniques. Additionally, the banks have emphasised how consumers may spot these frauds and prevent falling for them.

What is a credit card reward?

Most banks, financial institutions, and credit card companies offer loyalty rewards that customers can redeem. Many customers use their reward points to save thousands of rupees and, on occasion, win gifts. While reward points are helpful for credit card users, they can also be used to deceive customers and steal their money. Reward point fraud is nothing new. Many times, people have lost a large amount of money in their quest for more reward points. Some fraudsters and scammers use reward point schemes to lure clients into providing credit card information.

Most credit cards have a reward points programme that allows you to earn points at a set rate whenever you use your card. After using your card for a while and earning a certain number of points, you can redeem your credit card reward for a variety of options, such as vouchers, products, air miles, or cashback credit on your statement. Rewards credit cards provide some form of “reward”—typically cash back, points, or travel miles—for the money you spend, subject to certain limits. Depending on the card, you can then apply the benefits of credit card rewards in a variety of ways.

Credit card reward scam.

As credit cards are used more frequently, credit card scams also rise often in India. The increasing number and diversity of people using the Internet for transactions, as well as the comfort that consumers are feeling with remote payment alternatives and the volume of online sales, are all targets for scammers. The target receives a call, text, or email alleging that their credit card was overcharged for a good or service or he is entitled to cashback or a cash reward. The victim is informed that they need to divulge sensitive information in order to receive a proper refund.

In this type of cashback scam, fraudsters may contact you and claim you have won a large sum of money, a trip for two, or fancy electronics in a contest in which you do not recall participating. Before they provide you with the cash or cashback reward, they may want your private bank information in order to wire you the winnings or an upfront payment to cover shipping and taxes. After you pay them, the fraudster will vanish with your money and your prize.

The techniques to execute reward scams.

Cashback scams are fraudulent schemes in which criminals entice you with the promise of receiving money back on your purchases but then take your money or personal information. Scammers may be persuasive and target people in a variety of ways, so it is necessary to be aware of their tactics to avoid falling victim. There are a few techniques that they adopt to trap their victims. These are the following techniques:

• Fake offers: Scammers may spread fake offers and schemes through unsolicited interactions, social media posts, or phishing emails. They’ll provide enticing cashback packages that seem too good to be true, frequently promising significant returns or money-back guarantees.
• Urgency and Pressure: Scammers may generate a sense of urgency by claiming that the deal is only suitable for a limited time or has a limited number of seats available. They pressure you to act right away rather than giving you time to consider the offer critically.
• Information Stealing: Once they’ve captured your interest, scammers will try to trick you into providing personal or financial information. It includes clicking on fraudulent websites, downloading contaminated software, or entering your credit card or bank account information.
• Fake Websites and Apps: Some credit card scams may lead you to fake websites or download fraudulent apps that look to be authentic. These platforms may collect your information or even lure you into performing microtransactions that cost you money.

How to explore credit card reward scam?

Using your credit card has the advantage of convenience. Moreover, it offers many financial benefits, such as bank offers, discounts, and reward points. You should constantly be on the alert for scammers who can try to fool you by offering to give you additional points or assist you in redeeming ones that you already have, even if you can use these reward points to gain money. Be wary of unexpected cashback offers, especially from unknown senders or suspicious websites. There are a few points that you should always keep in mind to save yourself from being the victim of such credit card reward scams:

• If the offer appears too good to be true, you should understand that it is not authentic. So avoid making any unrealistic promises about big cashback or guaranteed returns.
• Always keep in mind that legitimate reward schemes will not include limited-time incentives that compel you to act soon. If it is so, be sceptical.
• Reward points are automatically credited; therefore, do not believe in any reward point promotions.
• If any of the unknown sites or anyone unknown to you ask for banking information, be alert. Never share your financial or banking information on an unknown site or with someone you don’t know.
• Do your research before joining any cashback programme; study the company or platform offering it. Look for reviews and see whether they have a credible online presence.
• Stick to reputable sources to choose cashback plans offered by well-known shops, credit card companies, or trustworthy loyalty programmes.
• Above all, be aware of typical fraud and phishing techniques. Be cautious with clicks and downloads. Never click on suspicious links. Avoid downloading software from unknown sources.

Precautions to be taken to avoid these scams.

Being watchful and aware of internet fraud is crucial. Additional safety precautions should be taken to stay away from such scam games.

• When you get unwanted calls, emails, or messages, be wary and never share them, especially your personal or bank details.
• Check the origin of any message before responding in kind.
• Make direct contact with your bank or the institution by utilising the contact details listed on their official website or statement.
• Don’t click on links in emails that come from unidentified sources.
• The issue can be resolved by looking over your credit card statement, getting in touch with the credit card company to confirm the purported overcharge, or following up via the service provider’s official customer support channels.
• Always open your browser independently, enter the correct address to access a website, and log into your account. Never click on a link in an untrustworthy email.
• Verify the URL to see if it matches the official website by checking the link before clicking.
• Use antivirus and anti-malware software to keep your gadgets safe. These tools are helpful in identifying and stopping malware downloads.
• For your online accounts—especially those linked to banks and other financial websites—use strong and distinctive passwords.
• If you want to create and keep safe passwords, think about utilising a trustworthy password organiser.
• Protect your personal information, and never give out your financial information on untrustworthy platforms or to people you don’t know.
• Contact your bank, the relevant authorities, and the cyber cell if you believe you have been the victim of fraud or have received a scam message.

Wrapping up

Credit card scams can take many shapes, but the end goal is usually to trick you into supplying your credit card and personal information or to persuade you to give the scammer money. The scammer can sell your credit card information, try to use it before your notice, or take the money and leave.

FAQs.