Scam artists getting slicker, doing $1 test transactions and then racking up huge purchases

It's just a buck. How much trouble can that be?

And so you shrug at the odd little charge on your credit or debit card, maybe for an iTunes download you're not sure you remember but, oh well ...

That's exactly the reaction scam artists want. It's a green light to start ripping you off big time.

"It's a test transaction," warned Evan Schuman, editor for StorefrontBacktalk.com, a technology blog read by major retailers.

"If that $1 transaction goes through and nothing happens, they know it's good to go," added Terry Thornton, senior vice president, fraud services, for Comerica in Auburn Hills, Mich.

What's probably happening: Somehow the crooks have your number; maybe it was among thousands stolen in a big security breach. Now they have to see whether it works so they can go on a spending spree.

"You want to establish which of these cards is valid and real," Schuman said. "It's a race against the clock."

Once that $1 purchase clears, thieves move fast, spending hundreds of dollars on gift cards or other items before anybody realizes what's happening and the card is shut down.

They move fast, knowing the card will be shut down at some point. But they can do a lot of damage before that happens.

This summer, the Arizona attorney general sent out a warning that credit card skimming is on the upswing.

But you're careful. They won't get your number, will they?

They have their ways, and they are getting slicker all the time.

The Internal Revenue Service warned this summer of scammers claiming to be with the IRS and offering help getting your tax refund. The IRS, of course, does not contact individuals by e-mail.

But if you fall for it, phishers then use the personal information that you supply to steal your identity, get access to your bank accounts, run up credit card charges or apply for loans in the victim's name, according to the IRS.

What's more, clever, hard-to-detect devices are being installed on gas pumps _ or even at bank ATMs. The electronic device records your card number off the magnetic strip. Arizona officials said such skimming devices were found on two ATMs at banks in Scottsdale. One bank in Arizona also told that state's Attorney General's

Office that many of its branches statewide had customers who reported trouble.

Jason Roth, an Apple spokesperson, said iTunes is always working to prevent fraud and now requires more frequent re-entry of a customer's credit card security code. But Roth said if your credit card number or iTunes password is stolen and used on the music service, contact your financial institution and consider canceling the card. You'd also want to report any unauthorized transactions to the bank.

It is also important to change your iTunes password immediately if you suspect fraud.

High-tech devices such as skimmers are not easy to detect. Bankers say consumers should be wary of using any ATM that appears strange or out-of-the-ordinary.

Some skimmers could be using miniature remote cameras to capture the PIN of card users at an ATM or gas pump. They even use wireless technology to intercept signals.

But it's not all so highly sophisticated.

Fraud experts report that they're hearing more scams involving odd pleas for money - now sent far and wide by scammers who tap into e-mail lists or social-network sites such as Facebook for names and personal information that gives them a ring of authenticity.

"They hijack your e-mail and they hijack your contacts in your e-mail," said Adam Levin, co-founder and chairman of consumer website Credit.com and Identity Theft 911.

And then a con artist sends an e-mail to your co-worker, friend or relative. The e-mails can sound legitimate. The sender might claim to be stranded somewhere after being ripped off and in need of money immediately to pay a hotel bill.

Levin said his niece and her husband had their e-mail invaded by fraudsters who then mined all of their contacts for money. Despite the many warnings about this type of scam, Levin said a few people succumbed.

"Obviously, not everybody got the memo," he said.

Unless you pay cash for everything - which few of us can or will do - we all need to be more careful than ever with our account numbers. Check your accounts more often; don't just wait for monthly statements. You can call or go online to see recent transactions.

And don't ignore that odd $1 charge; it could be the start of something big _ and bad.

THEFT PREVENTION TIPS:

  • Be careful of any PIN numbers; at an ATM, use one hand to cover the numbers as you punch them in.
  • If buying gas with a debit or credit card, you can go inside to pay instead of paying at the pump.
  • Do not give cash to people who offer to buy your gas at the pump with their credit card; the card could be stolen.
  • If you suspect skimming, contact your bank and local police. Some experts suggest that you not rely on a store clerk to call police, since there have been cases in which employees were involved in the crime.
  • To report fraud, go to the Internet Crime Complaint Center at http://www.ic3.gov.
  • If
    • someone calls and says he or she is from another bank and needs to confirm your address, hang up.
    • If someone calls saying he or she is in a jam and needs help in the form of money or a credit card number, hang up. Delete such e-mails, too.
    • Open a separate credit card account for online purchases.
    • Consider opening a separate debit card/checking account for everyday purchases.
    • Instead of using a credit card online, you might consider purchasing a gift card at a store. You can use it for some online transactions.

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