You see a small charge on your credit card you don’t recognize.
What do you do?
Small charges you don’t recognize can be a sign of a bigger problem. The New York Times takes a look at a lawsuit filed in March by the Federal Trade Commission, which claims that during the past four years, scammers raked in more than $10 million by putting small bogus charges – ranging from twenty cents to $9 – on consumers’ credit and debit cards. And in a scheme that apparently has dragged out for more than a year, scammers have made fake $1 purchases on iTunes customers’ accounts, only to follow up with increasingly larger ones, sometimes totaling hundreds of dollars.
An unknown charge could mean your account was compromised. Or it could just be that you don’t recognize the name of the company billing you for a purchase you made. After all, merchants have a limited number of characters with which to describe their products and services on statements, and those descriptions can be cryptic.
So what should you do when you find an odd charge on your credit or debit card statement? Here’s how I would handle it:
1. Call the merchant to find out whether the charge is for an item you actually purchased. If the phone call doesn’t clear it up,
2. Call your credit card company and file a dispute.
3. If you believe your card number has been compromised – especially in the case of a debit card – cancel the card and ask for a replacement with a new number.
Remember, under the federal Fair Credit Billing Act, the most you can be held liable for is $50 in unauthorized purchases, and that’s only if the card was physically presented in the transaction. Most card companies won’t even hold you responsible for that if you notified them of the fraud promptly.
However, you have to read your statements to identify fraudulent charges – especially the small ones that are easy to overlook.
Gerri
Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes
budgeting, debt
recovery and savings information online. She is also the co-author of Reduce Debt,
Reduce Stress: Real Life Solutions for Your Credit Crisis.
Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.
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I’m glad you guys wrote about this. I actually had an incident a few months back where I had a mysterious charge in China for $1,100 on my debit card. It turned out that some scammers had gotten a hold of my debit card info when at the gas pump when I swiped my card at the local Chevron.
Turns out they had some sort of technology that could get my Debit card info that way. I had to call my bank and dispute the charges and they reversed them for me because they could see that I was making charges locally in the United States right around the time the charge in China took place.
I bring this up because as in this case, you can’t always call the Merchant. So I had to call my Bank/Credit Card company immediately to resolve the issue.