College tour donation turns into $1,000 scam
Detroit Metropolitan woman’s $50 tap-to-pay donation was charged $1,000 – experts warn of contactless ‘ghost eavesdropping’.
- New tap-to-pay scams depend on victims rushing to avoid checking the actual amount charged or the name of the company receiving the payment, experts warn.
- The Better Business Bureau warns that some victims have lost money without even being able to hand over their credit cards. Criminals can use wireless devices to perform so-called “ghost eavesdropping.”
We’re heading out to fun summer spots, checking items off our back-to-school lists, and generally trying to get some sunshine in what’s left of summer. And what about the scammers? Well, they have a great plan to steal cash from our smartphones and smart watches.
The elaborate scam experienced by a young woman in metro Detroit is not something you hear about every day. But experts warn that it’s easy to try to boost popularity, so be careful.
And scammers are making a lot of money.
In late June, a 29-year-old woman was approached by two men who appeared to be high school students at Walmart and agreed to donate $50.
In my opinion, giving someone $50 is a pretty generous act. But she may have felt a connection when the young men told her they were raising money for a trip to see some universities.
According to a police report, the men approached her just after 6:30 p.m. on Saturday, June 27, and asked her if she was willing to make a donation.
Following their suggestion, the woman used a tap-to-pay contactless payment system on her iPhone. However, she later told police she thought she was simply donating $50. She did not confirm the exact amount on the payment system.
According to a police report filed later that night, the woman checked her account and discovered the transaction amount was $1,000 instead of $50.
Walmart did not respond to questions from the Detroit Free Press, part of the USA TODAY Network, about whether the company has seen an increase in similar donation requests or scams targeting shoppers.
This is an ongoing scam that we all need to avoid.
Tap-to-pay scammers will bet on you being nice and in a hurry.
You may be living in the moment, even if you seem a little distracted. And someone might approach you. Maybe you’re raising money for a sick relative. Maybe you need to cover funeral costs. Maybe you’re raising money for charity.
They then ask you to make a relatively small donation and use the tap-to-pay feature on your card or mobile wallet to steal money through your credit or debit card.
Scammers are counting on us to eavesdrop, without seeing the amount charged or the name of the company receiving the payment, experts warn. And they know you’re going to rush the process – or you’re rushing to get the shopping done or get dinner on the table.
Here’s a pro tip: As superstar Dionne Warwick would say, walk. When you start hearing strangers tell sob stories on the street, hold tight to your phone or tap-to-pay card.
This is a real face-to-face scam that charges consumers real money.
According to a Better Business Bureau alert, one consumer lost $537 to one of these tap-to-pay scams when he purchased candy under the guise of a door-to-door fundraiser for special needs students. Another victim lost $1,100.
The Better Business Bureau warns that some victims have lost money without even being able to hand over their credit cards. The BBB warned that criminals can use wireless devices to steal money without touching your card. It’s called “Ghost Tap”.
In some schemes, criminals try to approach you in public, perhaps “accidentally” bump into you, and initiate fraudulent payments by approaching your cell phone or tappable card. However, the scope of this type of fraud seems to be very limited.
The term “ghost tapping” refers to contactless fraud in which someone attempts to set up a tap-to-pay transaction without your permission, even though you don’t have your credit or debit card in hand. Consumer watchdog groups say scammers are using the devices to collect data from cards.
Get the “rejection script”
Amy Nofziger, senior director of victim support for the AARP Fraud Watch Network, explained that scammers are catching people off guard. Scammers know how to exploit tap-to-pay technology to distract users and immediately charge them more money than they agreed to.
Nofziger said consumers often call the AARP Fraud Monitoring Network Helpline to complain about sudden fraudulent charges on their accounts. They don’t know how it got there. It could be the result of “ghost eavesdropping,” identity theft, or a lost or stolen card. It is difficult to determine what kind of fraud took place.
However, with reports of donation-related scams on the rise, it’s important to be extra vigilant when someone approaches you in a seemingly innocent manner, whether it’s on the street or door-to-door in your neighborhood.
“Just like we need to ensure our personal safety when we go out in public, people need to ensure their financial security when they go out in public,” Nofziger told the Detroit Free Press.
Be careful when you’re in the parking lot because someone might approach you and tell you a sad story or ask for a donation, she said.
“Create a rejection script,” Nofziger advises.
Be prepared to say things like, “I won’t give money to organizations or people I don’t know.”
Or better yet, just keep walking. Seriously. Keep moving, don’t engage, and don’t take out your mobile wallet, credit card, or debit card.
Nofziger said a red flag of tap-to-pay fraud is that people on the street or door-to-door often refuse to accept cash. If you hand over cash, you could lose $5 or $10 to the scammer. However, the risks are much higher when providing money via mobile wallets.
Nofziger said we may start to see more in-person fraud because, frankly, we won’t be able to catch the scammers.
Many people are now well trained not to answer calls from unknown numbers, she says. Or, if you do answer the phone, the person who calls you out of the blue and claims you owe taxes or utilities is likely to hang up at some point.
But we become more anxious when someone is standing right in front of us.
“It’s hard to say no,” Nofziger said. “That’s why we need to practice the script of denial and the no.”
She encourages people to call the AARP Fraud Watch Network helpline at 877-908-3360 if they suspect fraud or have lost money to a scam. Our fraud experts will advise you on the next steps to take.
If you think you’ve been scammed, you should report the charge to your bank or credit card company as soon as you realize you’ve lost money. We want to stop any further fraud and see if you can get your money back.
How to protect your money from tap-to-pay fraud
The Michigan Attorney General and other consumer watchdog groups also offer these tips:
- Please read before tapping. On the screen, note the name of the merchant, the total amount charged, and the amount displayed as the tip amount. Make sure that no one is charging you an exorbitant amount of money at the time of purchase.
- There’s no need to rush. If someone pressures you to tap faster, slow down or walk away. Avoid getting caught up in the conversation and losing focus on the trade.
- Be on the lookout for charges you don’t recognize, including strange small charges, which could be an early sign of fraud. Notify your bank immediately.
- Set up alerts from your bank or credit card company to let you know when a charge is made.
- Use a wallet or sleeve that blocks radio frequency identification (RFID) to prevent your card from being read through your pocket or wallet.
- Turn off Near Field Communication or NFC tap-to-pay when you’re not using your phone.
- Please check your mobile phone. If you use Apple Pay or a similar app, make sure you have to unlock your phone and check all notifications to make payments.
Contact personal finance columnist Susan Tompol: stompor@freepress.com. follow himr X @tompor.
