While it usually pays to be an informed shopper who seeks out the lowest interest rates, a new credit scam is targeting savvy deal hunting Canadians. For a fee, these fraudsters are promising unaware customers low interest credit card rates, while at the same time collecting highly sensitive personal data. The Financial Consumer Agency of Canada (FCAC) is warning Canadians to be cautious when giving out sensitive information over the phone or online. A major red flag is the fee charged for these interest rates; no legitimate institution would charge you for a low interest card.
To set up the scam the fraudster calls or sends an email to a possible victim promising to secure them a credit card with an interest rate lower than they could get at a bank or financial institution. For their service they charge a fee. If the person falls victim they have lost out twice - first, by giving away sensitive information to a person who is going to use it for no good and secondly for paying a fee for a false service.
It's classic advice on how to avoid being a victim of fraud, but it’s still valid. Never share sensitive information with a company by telephone or online unless you contacted them and are completely sure you're talking with a reputable business, says the FCAC. They also point out Canadians should never be asked to pay third party fees for a low interest rate.
If you're asked to pay a fee to get a low interest card, treat this as a warning and report the behavior to the FCAC. You can also contact the Canadian Anti-Fraud Centre to report the scam.
If possible, the FCAC asks you to take the following steps:
The FCAC points out that anybody living in Canada can apply for a low interest card on their own. There's never a need to involve a third party. By simply visiting the financial institution offering the card in person, online or on the phone, anybody can start their application process. RateSupermarket.ca also has a selection of low interest offerings to choose from. Give the credit card comparison engine a whirl to find the right option for you.
Bonus: Until August 31, RateSupermarket.ca is giving away a free $100 gift card upon approval of the Platinum Plus® MasterCard® Credit Card. This low balance transfer card offers a full year free of interest on balances transferred from another card, and comes with no annual fee!
With Canadian debt levels at record levels and climbing, it can be tempting to sign up for a low interest card to get your hands on some extra funds. However, the old rule applies: if it's too good to be true, it probably is. Make a plan to start paying off debt right now and stay away from unreliable offers.