Credit Card Fraud: It Can Happen to You

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Credit Card Fraud: It Can Happen to You

This wasn’t supposed to happen to me.

You see, as a financial writer, when I cover a story about credit card fraud, it’s supposed to be in the third person — about what happened to some unfortunate victim, or about how laws help protect consumers, etc. It’s not supposed to be in the first person. I’m not supposed to be the victim.

And yet there I was, a couple months ago, scratching my head and trying to figure out what this charge for $1, 196.62 on my one of my credit cards could be.

Now, that $1, 196.62 caught my eye for three reasons. First, I am notoriously cheap, so when I spend a thousand dollars, I tend to remember it. Second, at the time I was using this particular credit card as my back-up, so I was a little surprised to see any balance owed. Third, the description line for the transaction read “Award Headquarters.” I had no memory of contacting any sort of “Award Headquarters.” Come to think of it, being charged over a thousand dollars doesn’t seem like much of an award.

There was also a telephone number for Award Headquarters on that transaction line, so I called the number. They said they had no record of a transaction in my name.

After checking that the credit card was still safely in my wallet (it was), I called the credit card company. After wending my way through the phone tree and punching in my credit card number plus the last four digits of my Social Security number, I got to speak with a representative. She promptly asked for my credit card number. Then the last four digits of my Social. Then my mother’s maiden name. Once I had satisfied her with my credentials, I asked what her name was.

“Carmen.” Just Carmen. They won’t give last names, which is a little disconcerting. After all, she not only knew my first and last names, but I had also supplied my credit card number (twice), part of my Social Security number (twice), and my mother’s maiden name. Still, all I got was “Carmen.” It dawned on me that this was going to be a decidedly one-sided relationship, and those are never very satisfying.

Seriously though, I have never done anything professionally that I was unwilling to put my name on. Any organization that wants to improve its customer service could start by insisting that its representatives use their full, real names. It’s amazing how accountability improves performance.

Anyhow, I explained to the enigmatic Carmen what had happened. She said that all she could do was report it, but that she couldn’t guarantee they would take the charge off of my statement. I started to smell a rat. I’m not a credit card expert, but I deal with the topic enough to know that there are better consumer protections than that. Still, I could get no further with Carmen, so I hung up. I double-checked online, and confirmed that consumer liability is limited to $50 for unauthorized transactions.

I then did one smart, and one dumb thing. The smart thing was that I reported the problem to the credit card company in writing. I’ll get to the dumb thing in a moment.

A couple of days later, I got a telephone call. A very efficient woman from the credit card company said she was responding to my report of a suspicious transaction. I asked her, just out of curiosity, whether she was responding to my earlier phone call, or to my letter. She said it was my letter. Apparently, the U.S. Postal Service can get a letter 80 miles faster than Carmen can report a call from one department to another.

Anyway, about that dumb thing — the woman calling about my letter pointed out that we should immediately cancel my card and replace it with another, to prevent any further abuse of the compromised number. She was right, of course — the dumb thing was that I should have thought of that myself in the first place.

From there, everything went smoothly. The suspicious charge was wiped off of my statement, and the credit card company put me in touch with their fraud investigation service to look into what had happened. The last I heard, they were putting the onus on the merchant to justify the charge.

So, here is a summary of the takeaways from this experience:

  1. Regularly check your credit card transactions line-by-line for suspicious activity.
  2. Immediately report any suspicious activity.
  3. If you have reason to believe your credit card number has been compromised, immediately cancel that card.
  4. Follow any such report with a written account of the situation.
  5. Know your rights – once you’ve reported an unauthorized transaction, your liability should be limited to $50.

As much as this was a useful experience for a financial writer to go through, I’d prefer that it had not happened to me. Then again, without it, I would never have gotten to meet Carmen.

16 Responses to “Credit Card Fraud: It Can Happen to You”

  1. Seems to me your CC info was compromised by someone you had spoke to on the phone. Most likely an overseas person working for a cable, cellular or internet company (not pointing at any one culture or area, a majority of compliance incidences are recorded overseas, but they do happen in major countries as well occasionally so it’s possible it happened from a US agent but it’s unlikely). “Reward Headquarters” and “Award Headquarters” are nomers for a company that handles a point system for call centers that agents can turn in to get rewards such as gift cards. If a person does not have enough points they can use a credit card to make up the difference so that’s likely why and how your information was compromised if you don’t know anyone who might work for a call center.

    The fact of the matter is that US consumers can be some of the rudest in the world, so much so, that even US employees do not want to talk to those in the US. This leads to high turnover rate and rising training costs, which increases the likelihood of outsourcing to cut costs, which decreases the quality and safety of customer service

    As someone who works with PCI compliance, I can tell you it’s getting worse, not better. Industries with the lowest average NPS typically get the rudest customers which leads to people quitting > outsourcing so the TV industry in particular is where you see a lot of this (Time Warner, Cox, DIRECTV/AT&T, Dish). This is all generalized and no one area or generation can take all the blame (although California can take quite a bit), but so long as US based agents continue to despise talking to US customers, other countries will fill that void that void for $10 a day along with your cc info. (once again, not saying you are to blame, you are likely just collateral damage from the state of the industry)

  2. Anonymous

    This happened to me a few years ago. I do not make big purchases unless it is a major home repair or a car fix. I was checking on of my credit cards and lo and behold was a charge for $1000+ dollars just 3 days before at a sporting goods store. Plus there were other small charges at the same sporting good store (I guess the person using my card was testing the waters to see if they’d get caught before making a big purchase). The most I have ever spent at a sporting goods store was maybe $100 for shoes for my kids.
    I called the credit card company up and told them what happened and they were very nice about it. They told me to make a report with the police and they were going to just close my account but I said to cancel it and just issue me a new account number and card. I called the police and made a report and then I called the credit card company back to give them the police report number.
    I then called the sporting goods store to try and find out info on this person because the order was done online and was being shipped to their address or someone else’s. I could not get any info out of them. The order had not reached the person yet was all I could get out of them.
    I receieved all my money back in about month. Another good thing to do is check your children’s social security number with the credit bureau’s and you can also put a freeze on their credit so no one can use their social security number

  3. Anonymous

    I used to be a Customer Service Representative for many credit card companies and the service you got from Carmen was poor. Whenever anyone calls in to say that they did not make a charge, the card should immediately be cancelled and a new card reissued. My only thinking is that she thought is was a dispute rather than fraud (they’re different and have different rules). Still, it’s partly her job to clarify.

    In regards to providing last names, it is not required because there are some crazy people out there. I received many calls where the person threatened me with physical violence because I could not say what he/she wanted to hear. However, almost every CSR has an ID number that we can give so that dissatisfied callers can use if needed.

  4. Anonymous

    Fraud and unauthorized charges are a massive problem for millions of consumers. This writer was, in a sense, fortunate that his unauthorized charge was made for such a massive amount of money, which enabled him to spot the suspicious charge right away and pro-actively take actions to correct it. Millions of others, unfortunately, are scammed out of small increments of money — $10 here, $5 there — and never realize it. Third-party bill monitoring services can help with this, but its ultimately up to all of us, collectively, to figure out ways to avoid sneaky charges.

  5. Anonymous

    About ten years ago my wallet was stollen and some purchases were made on my debit card ( I don’t own credit cards). The moment I found out it was missing a call to the police helped clear things up for me. The lady I spoke with explained what needed to be done and this calmed me down, since when you have things like this happen, you tend to get slightly irritated.

    So a call to my bank stopped any further bleeding of funds. I dropped by my local branch the next day and signed an affidavit. That was it. Stollen funds were redeposited to my account, and a new card on its way.

    P.S. My wallet had been missing for approx. two hours and had about 100.00 dollars or so charged off.

  6. Anonymous

    Jessica) You are still defending ‘Carmen’, who didn’t even do her job? If you call a bank about fraudulent charges: a “professional” customer service rep would immediately start the paper-work/documentation for disputing the charge, cancel the existing card number (to prevent further fraud), and get a new card mailed to the customer.

    This is my experience (with Bank of America), as well as other people’s experience posting here with different banks (see John #7 above).

    Richard’s snail-mailed letter should not have made it to the CC fraud department before Carmen’s report. Carmen simply did not do her job, at all.

  7. Anonymous

    Viola,

    Those employees have name badges with FIRST names for similar reasons. In my experience if a name badge has last name information it is usually only for someone in management who makes a higher salary and is accountable for store performance, and even then that is rare to find.

    Richard,

    I am sorry you received poor customer service, but Carmen is probably carrying out a shady business practice put in place by someone higher up at the company for whom information is available; it is unintelligent to think that any old crazy person knowing the full name of a low wage employee who must follow a script or receive a warning (those calls really are monitored) would result in faster service than filing a complaint. Do you really think Carmen, who probably receives hundreds of these calls, is regularly risking her job by not following the standard way of handling things? It also doesn’t seem like you’re going to take your business elsewhere making you the consumer part of the problem, much more than Carmen. If this is really the attitude and lack of thoughtful reflection before posting of the author, I’m not coming back.

  8. Anonymous

    Some credit card companies like my Capital One and BP Visa have an email reporting feature. You can specify a certain dollar amount and when that amount, or higher, is charged to your account you will get an email stating the transaction, usually within minutes of it being posted.

  9. Anonymous

    There’s a good chance Carmen is not her real name. Many customer svc folks have a “phone name”.

    Think about how many Allan’s, Dave’s and Lisa’s we have talked to that are in Bangalore?

    That said, i guess they could always have a “phone last name” as well.

  10. Anonymous

    I am surprised that the author had such an unhelpful experience with his credit card company. I have had many similar unauthorized charges on my various credit cards and have never received such unprofessional, unhelpful service. I would be curious to know which bank this was, though I have my own ideas as to who it was – Capital One, comes to mind. I only have Citi, Chase, Bank of America, Sears, Discover. Anytime this happens, THEY immediately are very proactive and transfer me to the fraud department and cancel the card and reverse the charge or put it in dispute. They send me a new card with new number, most often by Express FedEx or UPS so I get it overnight. A few times I told them no rush, so they sent it regular mail. Why make them pay for rush service when not needed, right? Anyway, Carmen needs to be retrained.

  11. Anonymous

    Jessica is right. There’s a legitimate safety issue involved which is why the IRS relies on an identification number rather than full names. Someone working for minimum wage or close to it shouldn’t be subjected to the unnecessary risk of giving their full name to hundreds of people they talk to every month. It’s not hard to imagine a scenario where some rightly or wrongly disgruntled customer decides to do something inappropriate. If you’re concerned about accountability, ask the rep for an extension or some other way of identifying them that doesn’t put them at risk.

  12. Anonymous

    Good points, both BG and Viola. I think you’ve both helped out with illustrations of the point that people in a great many walks of life are willing to be accountable by name for their job performance. Jessica, sorry if you still don’t agree, but regardless of your feelings on that point, I hope you don’t beleive that Carmen’s attitude and actions under the circumstances represented acceptable customer service.

  13. Anonymous

    As carefully as we are, there are numerous fraud charges on our credit card accounts over the years. Credit card companies these days are very efficient in alerting their clients of any suspicious charges. When you call about suspicious charges, you should be immediately referred to the fraud department. The card should be cancelled immediately and a new card be sent to you.

  14. Anonymous

    When you call the IRS helpline, each rep you talk to gives their last name (but not their first), and their employee identification number. They also don’t ask you for any identification information.

    Very professional the IRS customer service people are. Private business could learn a lot from true professionals.

  15. Anonymous

    Do you honestly believe that the average customer service person gets paid enough (I don’t think you could pay anyone other than a CEO enough) to have their full name and place of business available to any raging lunatic who might harm them because their possibly outlandish will was not obeyed? Or was your oversight a misguided and unsuccessful attempt at glibness?

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