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PSA: keep an eye on your credit card transactions for this season


mathnerd
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'Tis the season for unauthorized credit card charges. It began for me with my Discover card last weekend. the new modus operandi for credit card thieves this year seems to be:

1. to order on walmart.com or another big retailer close to your zip code and select "store pickup" for delivery. Then, they add their own name as a person authorized to pickup the merchandise in addition to yours. If you get an email from retailer websites, check them to see if it says that you ordered things that you do not recognize (like a laptop, a playstation etc).

2. Make charitable donations in small amounts like $5, $10 etc to GoFundMe website for causes like the California Wildfire to see if you notice all the small transactions. They look innocuous enough to be missed and they know that people donate during the holiday season. When the transactions go unnoticed, they know that the person is not watching closely and then, they make a big purchase on the card.

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Amex denied the transaction for IKEA East Palo Alto when we were trying to pay with our Amex card. We had to use another credit card. A few minutes later, we received a text message from Amex to say the IKEA transaction is regarded as fraud by them and gave instructions on authorizing making purchases at IKEA if we tend to shop there. 

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30 minutes ago, TheReader said:

Definitely. 

It can be helpful to check if your credit card or issuing bank has text alerts you can set; DH has ours set to text him for ALL online charges, ALL charges over $1, and ALL gas station charges. 

 

You are right. I do have credit card alerts set for all charges over $100 because I do not want too many alerts popping up and I missed all the small charges that were fraudulently posted. They make those small charges a few times to see if the credit card holder is paying attention and then go for the big charge. I am now monitoring all charges.

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But, I'm wondering what in the world the advantage is to making small charges.  It seems to make more sense to my criminal mind to make big purchases right from the get go. then shred the card or the number.  (I'm not a criminal, btw, I'm just profiling)  Case in point, my friend had a credit card stolen.  Within two hours, the thief had made three large purchases with her card (they went to Best Buy, and a couple other retailers).  They had spent about $4000 in two hours, while driving up from San Diego through LA.

When my daughter's card was stolen, in the same two hours, her thief had spent $7 at a cookie store, $30 at a dollar store, and bought five tanks of gas (must have called all their friends to come fill up -- one only needed about $4.00 worth).  

What is the advantage of spending a little when you could spend so much more?

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Spending a small amount shows the fraudulent user that the credit card information in their possession works (many of them buy or download stolen credit card information from hacker websites). If the charge went through, then they will start using that card. Also, if they ship an expensive item to their mailing address, they will get caught. So, they charge a bunch of small items costing a few dollars to the account to test if the real owner is monitoring the account. If nothing happens, then, chances are that they are the kind of people who only check their balances once a month, so there is enough time to order something big, have it shipped, pick it up and then move out of that address for them. They know when the billing cycles ends and also that people charge their cards a lot during the holiday season and are too busy at that time as well to check out small item charges. 

https://somervillebank.net/small-charges-can-mean-something-bigger-happening/

 

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Also keep in mind that if you have unauthorized charges on a debit card, it can take up to 10 days to get the funds back.  I do customer service for a bank, and I am daily getting calls from people reporting fraudulent charges or attempted fraud.  We have to cancel their card and file a dispute. More than once a person has gotten up in the morning and checked their bank balance to find they have been completely wiped out overnight (typical daily debit purchase limit is $2000).  I have had people crying on the phone that they can't wait 10 days for their funds to be returned to them.  

 

 

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1 minute ago, texasmom33 said:

So when it is a fraud, is it the card issuing bank who is eating the charge, or is it covered by an insurance the bank has? I've just wonder how that works. 

 

If you run a debit card as a credit card, then Visa or Mastercard's insurance eats the cost. If the pin was entered, the bank's insurance eats the cost.  Visa and Mastercard have more protection, so you should ALWAYS make debit purchases by forcing them to run as credit.  Stores design their payment devices to discourage that because it costs them more, but hackers will only have access to the way you paid in the store, so insist on running it as credit even when you have to ask how.

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1 hour ago, texasmom33 said:

So when it is a fraud, is it the card issuing bank who is eating the charge, or is it covered by an insurance the bank has? I've just wonder how that works. 

I'm glad Katy answered because honestly I don't know.  If it came up in training, I don't remember it. (I had a pretty whirlwind training.) Basically it's not truly relevant to my job, and I haven't had the wherewithal or interest to learn more at this point. No customer has ever asked - they just want their money back!  :-)

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16 minutes ago, marbel said:

I'm glad Katy answered because honestly I don't know.  If it came up in training, I don't remember it. (I had a pretty whirlwind training.) Basically it's not truly relevant to my job, and I haven't had the wherewithal or interest to learn more at this point. No customer has ever asked - they just want their money back!  ?

 

I worked for three huge financial companies but didn't learn this until a couple years ago, when there must have been skimmers on ALL the credit/debit scanners at the places I shop because my cards got duplicated 4 times in six months.

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1 hour ago, marbel said:

Also keep in mind that if you have unauthorized charges on a debit card, it can take up to 10 days to get the funds back.  I do customer service for a bank, and I am daily getting calls from people reporting fraudulent charges or attempted fraud.  We have to cancel their card and file a dispute. More than once a person has gotten up in the morning and checked their bank balance to find they have been completely wiped out overnight (typical daily debit purchase limit is $2000).  I have had people crying on the phone that they can't wait 10 days for their funds to be returned to them.  

 

 

 

This is why I switched completely to credit card use. I used my debit for anything and everything but when I realized that I could lose substantial chunks of money and would have to wait for it to be sorted out, I went to exclusively using my CC. Credit Card companies seem to be faster in refunding your money than banks are.

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2 hours ago, mathnerd said:

Spending a small amount shows the fraudulent user that the credit card information in their possession works (many of them buy or download stolen credit card information from hacker websites). If the charge went through, then they will start using that card. Also, if they ship an expensive item to their mailing address, they will get caught. So, they charge a bunch of small items costing a few dollars to the account to test if the real owner is monitoring the account. If nothing happens, then, chances are that they are the kind of people who only check their balances once a month, so there is enough time to order something big, have it shipped, pick it up and then move out of that address for them. They know when the billing cycles ends and also that people charge their cards a lot during the holiday season and are too busy at that time as well to check out small item charges. 

https://somervillebank.net/small-charges-can-mean-something-bigger-happening/

 

 

I understand buying smaller items (under $50) to avoid notice (as referenced in the article).  That was a good article, by the way.  I hadn't thought to check my accounts for small charges.  I need to be especially mindful of Amazon charges.  I have way too many of them, and sometimes they get split, so it's easy to lose track on my credit card statements.

But to make small "test" purchases before making a large purchase doesn't make sense to me. I just really don't understand WHY they are doing it that way.  With every attempted purchase, small or large, they have an equal chance of it being denied by the CC company.  With every successful purchase, large or small, made on the same card, there is more of a chance of it being noticed (I'm more likely to notice several fraudulent charges than one).  So, just because a card number worked last month doesn't mean that it will work this month.   Why not just attempt to buy something big.  If the card is good, it will go through.  If it is denied, then just act confused and leave the store. Toss it and try a different card (in a different store).  I really see no benefit to making small purchases as a test.  

Oh, and I'm not talking about online purchases.  All the large purchases made on my friend's card were made in b&m retail stores.  No way to trace.

Anyway, I'm just rambling, which means I am not doing the things I really should be doing right now.  And now I need to add "Check credit card charges" to my list!  

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22 minutes ago, Liz CA said:

 

This is why I switched completely to credit card use. I used my debit for anything and everything but when I realized that I could lose substantial chunks of money and would have to wait for it to be sorted out, I went to exclusively using my CC. Credit Card companies seem to be faster in refunding your money than banks are.

I never make purchases with the debit card either.  With a credit card, I've never even gotten to the point where I've needed a refund.  Just click "dispute," type in a few details, and poof it's gone.  I do have to go through the hassle of having the card canceled, but that's still better than waiting for money to come back to me.

Actually, I have been surprised by how much people use their debit cards. I see sometimes upwards of 10 transactions per day, at gas stations, grocery stores, fast food places, cash apps, online purchases.  For a while, I had a weird reaction which was to want to go spend money. But fortunately that didn't last. :-)

ETA: I do realize that not everyone wants to, or can, use credit cards.  I think if I couldn't use a credit card, I'd use cash if I was spending small bits of money here and there throughout my day.  ($2.50 at Taco Bell, $5 at Starbucks, that kind of thing). Those are just examples, but imagine 10+ of those a day on your debit card. That's a lot of exposure. 

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3 hours ago, Suzanne in ABQ said:

 

I understand buying smaller items (under $50) to avoid notice (as referenced in the article).  That was a good article, by the way.  I hadn't thought to check my accounts for small charges.  I need to be especially mindful of Amazon charges.  I have way too many of them, and sometimes they get split, so it's easy to lose track on my credit card statements.

But to make small "test" purchases before making a large purchase doesn't make sense to me. I just really don't understand WHY they are doing it that way.  With every attempted purchase, small or large, they have an equal chance of it being denied by the CC company.  With every successful purchase, large or small, made on the same card, there is more of a chance of it being noticed (I'm more likely to notice several fraudulent charges than one).  So, just because a card number worked last month doesn't mean that it will work this month.   Why not just attempt to buy something big.  If the card is good, it will go through.  If it is denied, then just act confused and leave the store. Toss it and try a different card (in a different store).  I really see no benefit to making small purchases as a test.  

Oh, and I'm not talking about online purchases.  All the large purchases made on my friend's card were made in b&m retail stores.  No way to trace.

Anyway, I'm just rambling, which means I am not doing the things I really should be doing right now.  And now I need to add "Check credit card charges" to my list!  

 

It's because stores tend to treat payment issues with large purchases with more suspicion than with small purchases.  Can't buy a candy bar and a soda with the first charge for $3.83?  The cashier isn't going to notice when you say "That's weird" and swipe a different card.  Buying a $400+ thing?  Chances are higher a clerk is going to want to see the card, type in the security code on the back, check ID, have a manager wander over to supervise, and remember your face when you try to make a similar purchase the next week and also have a card not work. Criminals being remembered means a higher chance of going to jail.

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