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Always Check Your Credit Card Statements

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Credit card statementLast month I explained the importance of reviewing your finances regularly. Today, I want to amend that post and warn that you need to check your credit card statements every single month. Check in on your finances “regularly,” be it a month, a quarter, or semi-annually; check your statements every single month.

Here’s a harrowing tale of how Dan Godding, of Loveland, Colorado, is on the hook for $11,000 in fraudulent charges because he didn’t review his statement. Since he continued to make payments on the debt, and Bank of America’s fraud department failed to catch it, the charges are considered legitimate.

In our Foundation post on Credit Cards, we learned that the Fair Credit Billing Act protects consumers against fraud. If you discover your card missing and report the loss, you are at most responsible for $50 of loss (most issuers offer $0 liability, meaning you are responsible for nothing). If there is a fraudulent charge and you haven’t physically lost your card, you can report it and you are still responsible for, at most, $50.

The mistake, in this case, was that Godding made payments on the debt, thus validating it. The lesson here is that you should always check your credit card statements, and any other statements, for fraud. It takes no time at all and fraudulent charges will almost jump off the statement at you.

(Photo: restlessglobetrotter)

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16 Responses to “Always Check Your Credit Card Statements”

  1. Steven says:

    Thing I like about Dan is that he admits it’s his fault, and doesn’t try to blame the credit card company. He’s being a responsible adult, something most people would not have the integrity to do and start raising a huge fuss.

    Complete opposite of the chick who was suing her “college” because she couldn’t get a job.

    • Jim says:

      That was very refreshing to hear him take responsibility, I hope it ends positively for him.

    • Chris says:

      I would not have blamed him for making a fuss in this case, I would. I watch my statements like a hawk but some people don’t. He was being RESPONSIBLE by paying his bills on time. He should not be punished because some one defrauded him and he did not catch it right away.

  2. Tom says:

    When I lived in NYC, members of our prominent co-op building were ‘taken’ by the workers in the mail room by intercepting mail containing their credit cards and card offers. Since these folks were very wealthy (and busy), many had accountants take care of their month-to-month finances, including paying their credit card bills. Since the accountants assumed the bills were valid and the clients never looked at their bills, it was a perfect crime — for a while… The boys in the mail room racked up $50,000 in fraudulent charges before they were arrested. How did they get nailed? One woman did her own finances – actually looked at her own bills. The advice in this article is priceless.

  3. Patrick says:

    I always check my credit card statement to make sure no fraudulent charges are on there. I also make sure that restaurants charge the appropriate amount. I had one situation where the restaurant charged the entire bill to my credit card when I split it with somebody else.

  4. Neil says:

    Godding clearly comes from a different generation than his granddaughter. (Well, aside from the obvious). He’s willing to take personal responsibility for his mistake in not checking his balance, and deal with the consequences, learning in the process.

    His granddaughter, though, comes from the “somebody else’s problem” generation. She complains about insufficient consumer protection. This drives me nuts. There is protection – by law $50 max liability, and most issuers $0. But the consumer has to pull their weight and let them know in a reasonable period – that way they have a chance to catch and prosecute the fraudsters.

    “I think, for one, there needs to be a law in place that enables people who have been taken advantage of, to prosecute those who have taken advantage of them,” said Coffman.

    Already exists. But yes, you do actually have to report the fraud so that those responsible can be caught and prosecuted.

  5. zapeta says:

    Ugh, what a nightmare. I can’t imagine not reviewing your statements. I check my balances online every couple days so anything fraudulent would definitely jump out at me.

  6. Ellen says:

    It’s a shame that credit card fraud is so prevalent these days. I once had my card stolen, though discovered it missing within the first few hours it was gone. The thieves had tried to charge gas to it at a station that required a zip code (which they did not know) and were denied. Luckily, I owed nothing for this instance. Though I have heard horror stories from other people who have had to invest substantial time and money to repair their credit. The process of fixing your finances after this type of thing is daunting, and I wish is on no one. There’s a good article on fixing what to do if this happens to you at http://tiny.cc/identitycrisis253.

  7. Oh my goodness, that is terrifying! I will definitely be more careful.

  8. eric says:

    I’m always on the ball about these things. Can’t be too careful.

  9. Tim says:

    it doesn’t say how long he was paying the bills. You do have somewhat of a time gap, from when you notice the fraudulent charges to report it regardless of whether you made a payment or not. BofA even lists that “charges after 60 days are not eligible for next day credit,” which suggests that there is a time gap, and suggests that the time gap can be even longer than 60 days. However, BofA does say “If you believe that a credit card transaction has been posted to your account in error, you may submit a credit card dispute. You must write to us within 60 days of the statement date on which the transaction appears.” This would imply that you could have had two billing cycles in which you made payments before realizing the fraudulent charges. BofA also instructs on how to dispute by, “Write to us as soon as possible. Do not send the notice on or with your payment,” which also indicates that you can make a payment and still dispute charges.

    One has to wonder how BofA’s fraud monitoring (part of BofA’s Total Security Protection), which is free with their credit cards, works since it should have picked up a sudden spike in activity especially if charges were being made in two areas at the same time (especially cash advances). I’d also have complained to BofA about this, because it should have triggered something.

    Anyway, i guess the guy had to have been paying for a long time or something, and the point is taken that you should always check your bills, not only for fraudulent charges, but changes to terms, due dates, amount due, interest rates, credit limits, etc.

    It sounds like the guy just took the first BofA person’s answer as golden and didn’t push the issue. He should have pushed the issue. I think he could have spent very little resources to prove that those were fraudulent charges to get BofA to consider them fraudulent, too.

  10. Mistakes happen– don’t make another, by letting the first one go unnoticed.

  11. Vic says:

    Jim I think you should change the title to “Always check your credit card statements BEFORE you pay the bill”. No sense is paying for debt that isnt yours and ends up in arbitration limbo :D

  12. Very basic yet a very good suggestion. I had a few fraudulent charges except for gratuity in restaurant (so check your Tip) . But I am more concerned about automatic subscription/bill etc that just went up in price or renewed itself.


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