Don Grady is a CPA and Professor of Accounting at National Louis University, Chicago.
We were at home watching T.V. and the phone rang. At the same time, I received a text message on my cell phone from our credit card company. The phone call was also from the credit card company. They were inquiring about a recent transaction on my credit card: a purchase in New Mexico of $500.
Someone, somehow had charged our account. I informed our credit card company that we did not authorize the purchase. They immediately canceled our card and removed the charge from the account. Under current laws, we are not held accountable for such fraudulent charges. That happened about two months ago, and we never learned how our account was compromised.
We were thankful that the card company had procedures in place to check on suspicious credit card transactions. Through their quick response, they prevented further erroneous use of our charge account. Our credit rating was not affected, and we were issued a new credit card with a new account number.
As if that was not enough of a bad experience, last week I was reviewing our monthly credit card statement and noticed a $1,500 airline charge from Europe. Yes, we were hit again on our new account. I immediately notified the credit card company of the erroneous charge on our account.
Guess what? Yes, they cancelled the card and issued us a new one. They will investigate the source of the charge through their fraud division, but were not optimistic about finding the perpetrator. They indicated that there is no way of determining how our account was compromised. They just want to invalidate the card quickly so it cannot be used erroneously again.
Iāve been hearing more and more from my business contacts that such fraudulent activities are on the rise, but now I have been victimized twice. Even though Sue and I are very careful how we handle our credit cards, our charge accounts have still been compromised.
We have now adopted some new procedures to help prevent being victimized again:
1. I have added an app to my smart phone so I can frequently monitor credit card activity on our account.
2. We have obtained a second credit card as a ābackupā so if our primary card needs to be cancelled, we still have a credit card to use.
3. We have lowered the balance amount in our bank account to which our debit card is connected in order to minimize loss if the debit card is compromised. We removed the overdraft protection on the account so it will not automatically cover amounts in excess of the balance in the account.
4. I now advise the credit card company in advance of any out-of-state travel so that they will expect account activity in those locations.
Monitor your charge accounts online frequently, not just when you receive your monthly statements. You canāt be too careful.
ā¢ Send your questions and ideas to: Sun Day, Frugal Forum Column, P.O. Box 7505, Algonquin, IL 60102, or, by email to: thefrugalforum@gmail.com
