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What is an interest rate reduction scam?

Criminals can scam you by trying to contact you to convince you to negotiate lower interest rates.
Find out what interest rate reduction scams are, and how to avoid them.

Criminals can use a number of different tactics to commit a credit card scam. While many people understand the need to remain vigilant online, it’s important to treat unsolicited calls with the same level of skepticism.

Some fraudsters will use the prospect of saving money to try to trick people into sharing sensitive information. They might even be asked to hand over money.

How do criminals use interest rate reduction scams?

Using pre-recorded messages, criminals will call unsuspecting victims and say that they’re able to negotiate lower interest rates with their credit card issuer. The message will claim that this can be done thanks to a special relationship with the issuer, and that the customer can save thousands of dollars.

Fraudsters try to entice victims by promising the opportunity to repay credit card debt up to five times faster. They also pressure victims to act quickly by claiming that the service is only available for a limited time. Some callers may even state that they offer money-back guarantees to appear trustworthy.

In return, however, the callers request an upfront fee. They may also ask for personal and financial information, which can then be used to commit identity and credit card fraud.

Can I reduce my credit card interest rate?

While some of these services may be legitimate, they are unlikely to be worth your time. The FTC found that customers of interest rate reduction services didn’t receive the advertised reductions or promised savings, and therefore struggled to receive refunds.

If you’re interested in reducing your credit card interest rate, then you can negotiate this with your issuer yourself. You’re just as likely as these companies to succeed, regardless of their supposed special relationships. You can call your credit card issuer’s customer service and ask if they can reduce your rate of interest. With persistence, patience, and politeness, your efforts may pay off.

How to reduce the risk of interest rate reduction scams

If you receive any calls advertising an interest rate reduction service, be extremely wary. Hang up or delete any messages that seem suspicious. Never give out your credit card information or other sensitive details like your Social Security Number over the phone unless you can confirm the call is from a trusted source.

The FTC prevents debt relief companies that offer these services from charging upfront fees. If a company asks you to make a payment before they have negotiated an interest rate reduction, they will be fraudulent.

You can also reduce the number of calls you receive by signing up to the National Do Not Call Registry at DoNotCall.gov. This prohibits telemarketers from calling you unless you have agreed to accept calls from the company, requested information from them in the last three months, or purchased a product from them in the last 18 months. If you receive a call that violates these terms, then you can report it via the registry website.

What to do if you think you have fallen victim

To help prosecute companies running interest rate reduction scams, report them to the FTC. You can do this by visiting ftcomplaintassistant.gov or calling them toll-free on 1-877-FTC-HELP.

You may be at risk of identity fraud if you have given out any personally identifying details to the caller. You should file a police report and a report with the FTC. It’s also good practice to set up a fraud alert with at least one of the major credit bureaus, so you are notified if anyone tries to apply for credit in your name.

Immediately notify your card issuer if your credit card details are compromised. They will be able to cancel your card, provide you with a new account number and launch an investigation. You can dispute any charges that you did not authorize under the Fair Credit Billing Act. Many issuers also offer zero liability policies for customers who are a victim of fraudulent activity.

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