A couple months ago, I received an e-mail from a PR person telling me about a new service call BillGuard. I get tons of PR e-mail and, almost without fail, they go straight to the trash.
That being said, this one caught my eye and I filed it away for later investigation. Fast forward about a month and the e-mail resurfaced in my inbox. I decided to dig deeper and I must say that I’m pretty impressed with what I found.
BillGuard is a free (more on that later) service that scans your credit and debit card statements in search of deceptive or fraudulent charges. In essence, it’s a crowd-sourced fraud detection system that “gets smarter with each click.” When something questionable pops up, it alerts you and asks you if the transaction is legit.
Of course, if there’s something truly fraudulent on your bill, you’ll still need to follow up with your card issuer to straighten it out. But without BillGuard, you may not have discovered the problem in the first place.
To use BillGuard, you have to create an account and then grant them read-only access to your credit card statements. This may sound scary, but it’s in many ways similar to services like Mint.com, with seemingly solid security and good privacy policies. They’ve also raised significant venture capital, so this isn’t a fly-by-night operation.
As of this writing, BillGuard claims to have saved users over $630k, having found “bad charges” in roughly 20% of the accounts they’ve scanned. The system also identifies and lists things like credit card fees and recurring charges. As such, it can help you ferret out zombie charges and the like.
My first thought was wow, this sounds too good to be true. I wonder how they make their money? As it turns out, they had originally intended to offer BillGuard as a “freemium” service, with the first card being free and a monthly charge for additional cards.
They have since transitioned to a completely free (to users) business model. To generate revenue, they are licensing their platform to banks who can integrate the service into cardholder accounts. They are also accumulating massive amounts of valuable (but anonymized) data on spending patterns, fraudulent charges, etc.
While this latter aspect might bother some, I’m not particularly worried. Credit card companies, retail chains, etc. are already mining my data to better understand spending patterns and improve their marketing tactics. At least BillGuard offers a direct benefit in return for access to these same data.
To make a long story short, I signed up for the service, granted access to my accounts, and was pleased to see that there wasn’t any obviously fraudulent activity. Yes, I could do this by hand, but I get busy and sometimes don’t have time to review statements in a timely manner.
I will say that it tagged a few transactions as questionable, but a quick review revealed that these were all legit. For the most part, these were charges from local merchants for which they didn’t have enough info to render a verdict. I marked them as okay and expect them to pass muster the next time around.
Going forward, they scan your accounts on a monthly basis and send you an e-mail with the results. All in all, it’s a nice system that has the potential to save you from fraudulent charges.
Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.