Finding Credit Card Fraud
I was reading a blog article on Free from Broke (http://freefrombroke.com/2009/05/receipts-prevent-credit-card-fraud.html) that identifies the importance of watching your credit card statements closely.
Credit cards can become a bit of a vicious cycle, not only from a debt perspective, but even from a tracking perspective. Just having a credit card makes it easier to spend, and makes it statistically more likely that a person will spend. Spending and buying more results in potentially more debt, but it also makes it more difficult to track all of the spending and whether the amount is correct or not.
Our credit card was used for fradulent charges a couple of months ago. The charges occurred in Europe and they happened over a Friday / Saturday. Fortunately, Quicken pulls in recent charges from Capital One during the middle of the billing cycle, and I noticed two charges before any more could be made.
In our first call to Capital One, we apparently did not specify that we need to talk to the fraud department. We disputed the first charge, however instead of simply disputing we needed to inform the fraud department. After we saw the second charge, we made sure we were talking to the fraud department, asked that the card be frozen and received a new card about a week later.
Some important lessons from this include:
Check Charges On-Line, Often
The best bet is to check the credit card site directly, and check it every few days. Even using Quicken I don’t receive the charges until a day or two after the charge. And at the end of the billing cycle, Capital One seems to shut down its feed to Quicken of my charges until the statement is ready. So checking on the card issuer site directly provides the most up-to-date information.
Call Immediately if there is Fraud
Call the credit card immediately if you notice fraudulent charges, and make sure you are speaking to the fraud department (or make it clear that this is not just a charge dispute, but fraudulent charges). You will need to complete some paper work identifying the fraudulent charges and return it to the card issuer.
File a Police Report
Filing a police report may not be appropriate for all scenarios. For our situation we did not file one — the police in our city are not going to go after someone who made two illegal charges for purchasing train tickets and a bus tour in the U.K. But, if there are more than 4 charges, the amounts are significant (more than $1000) or you know the person who made the charges illegally, it is important to file the police report.
Keep Receipts
If you are concerned about modified charges as in the situation described on Free From Broke, keep your credit card receipts. Admittedly this is something I do not do but it is something to consider.
Debit Cards
With debit cards it is important to be even more diligent. Protections available with credit cards are not necessarily extended to debit cards, unless your bank chooses to provide those protections. If you do not notify your bank within 2 days of learning about the fraud, you will be liable for much more than the $50 liability limit that credit cards provide. But aside from liability, with debit card fraud there is a good chance that you get overdrafted and are unable to make scheduled and regular payments from the account until the fraud is cleared up.
The bottom line is that you do need to keep a close eye on your accounts and identify suspicious charges or payments immediately.
