Sunday, October 31, 2010

Beware of Credit and Debit Card Scams

I was a victim of identity theft on my business debit card. Two fraudulent charges were made on my business account - both were under $10. How often have you seen charges that range from $2-$10 and for a second you wondered what the charge was but ignored it. Well I did just that.

The first charge I saw I assumed it was correct but I saw a similar charge two months later around the same amount of the first charge. I never bought anything from the company. I looked at all my receipts and bank statements. I researched the company. I called and let a voicemail message and never got a call back. The automated message stated they were busy helping other customers and to leave a message. I further researched the company phone number and other customers had been victims of fraud by the same company. It was a bogus company. I had been scammed.

I contacted my bank and told them of the fraud. They immediately placed an alert on my account and after 2 business days the charges were credited back to my account which totaled $18.98. If I never investigated these charges, the charges could have continued for years. My business account is with one of the largest banks in the country. I am going to open a new business account with another bank tomorrow.

The FTC has been cracking down on debit card scams. The FTC is investigating an international micropayment scam that stole almost $10 million from customers' credit and debit cards. Over 1 million credit cards were used to make fraudulent charges. Most of the charges were not disputed. The FTC closed down phony merchant accounts used by the scammers.

The charges were not detected by bank antifraud software. Some customers didn't bother to dispute the low charges. The identity thieves charges approximately $9.5 million over a 4-year period of four year starting in 2006. Here are 6 ways to protect your personal and business credit and debit cards from fraud.

1. Go with your gut feeling. Don't doubt yourself.

2. Don't give out your checking account number, tax id, personal or business credit card number over the phone unless you know the company and understand why the information is necessary.

3. If someone says they are taping your call, ask why. Don't be afraid to ask questions.

4. Companies do not ask for your bank account information unless you have expressly agreed to this payment method.

5. Do business with reputable companies. Be sure the company website has a physical address that is verifiable and a phone number that is answered by a live person. Verify the company phone number in the Verizon online yellow pages or do an internet search on the phone number.

6. Report the fraud to the FTC at by filling out an identity theft complaint form.

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