Being on top of your finances isn’t just about managing your money and reaching your goals. Unfortunately, in our current world, it’s also about recognizing and preventing fraud.
When I set out to audit our budget recently, I didn’t imagine that I would find someone stealing money from our accounts! I found two separate cases of fraudulent charges in two different accounts.
That’s pretty shocking for someone who is very on top of the family finances. They were both tricky cases, which I will explain and give a warning about. Then I’ll go over some best practices to do what you can to prevent fraud in your finances.
Finding fraud in our finances
Normally catching fraud isn’t too hard if you keep track of your spending and regularly look at your bank and credit card statements. It’s easy to notice that an expense is from a place you’ve never been to or purchased from.
One of the benefits of credit cards is that, if reported promptly, you won’t have to pay any charges that are fraudulent.
For example, years ago, we had a fraudulent charge of hundreds of dollars of Xbox gift cards. We immediately knew that wasn’t us. Or, when my husband lost his credit card in the airport and had charges from all sorts of airport vendors. Thanks to regularly checking our accounts, we caught and reported both of those instances of fraud quickly. As annoying as it is to have to wait for a new credit card in the mail and change all of your autopay settings for various bills and accounts, it’s nice to not be stuck with the financial consequences of fraud.
The difference this time was that the fraudulent charges were both from vendors that we already spend money with on a regular basis, so they didn’t stand out as erroneous or unusual transactions.
Adobe
The first story is one that I noticed before my budget audit and was part of my motivation to do it. We have an Adobe photo suite subscription that costs $11.99 per month. When I noticed charges of $45.04 per month for 4 months I just thought that my husband had changed our subscription. I didn’t notice that the $45 charges were coming out of our checking account (not the credit card where our real subscription was).
After 4 months of this, I said something to Mike and he looked into the charges. He called Adobe and they were able to trace the charge to someone in Alaska who had a subscription that was being paid through our checking account. Grrr! I tried to get the bank to take care of it, but they have a limit on how far back they can reimburse fraudulent charges. Since the first transaction was in February (older than 60 days), they only reimbursed one of the four $45 charges.
In a different call to the bank weeks after my first call, the bank thought that maybe Adobe could help me since the time frame was up for the bank, but since the bank had blocked Adobe from charging my account, Adobe had no way to track down the fraudulent account anymore, so there was nothing anyone could do. We were out $135 from fraud, which I realize is not nearly as much as it could be, but it still makes me mad!
Scribd
The next experience was thanks to our budget audit. After pausing my Everand audiobook app (which has always been billed as “Scribd,” a different product through the same parent company), I noticed that I still was billed for it in October. Confused, I retraced my steps and confirmed that I did in fact pause my subscription.
I then noticed that this charge was on a different credit card, not the one that I had used with my account. I looked back and saw that this wasn’t the only charge, but it had happened for several months. Just like the previous story, I didn’t notice the charge because it was a company I was accustomed to paying. Had I not conducted my budget audit, which inspired me to pause Everand, I would have continued getting double charged without realizing it. And by the time I eventually realized it, it would have been too late to be reimbursed. Thankfully, I was able to get all but one of the charges refunded, so I was only out $12. But it still made me mad!
An odd detail in both fraud cases
In both of these cases which look like subscriptions, there is a first fraudulent transaction, then two months of no fraudulent transactions, then consecutive fraudulent transactions until I caught and stopped the nonsense. It’s so strange that it happened exactly the same in both cases. Like the first try was testing if the transaction would be caught, then after two months with no report, it becomes a regular monthly charge. Maybe it’s just a coincidence, but the identical timing in both cases sure seemed fishy to me.
What can you learn from my fraud experiences?
First, track your spending! I do that meticulously in YNAB and had tracked all of these fraudulent charges as if they were ours. If they had been charges that were from unusual vendors, on the other hand, I would have noticed them and acted immediately.
Even if you aren’t actively tracking your spending like I do, at least look through your bank and credit card statements each month so you can see if there’s any funny business in there! I believe this is the most common kind to fraud that you’ll experience.
Second, talk to your partner! If anything looks unusual, ask instead of assuming! Had I done this in the first place, I would have saved us $135 and a way too much time on the phone.
How to prevent fraud in your finances
I don’t know how my checking account was used for the Adobe subscription or how my credit card number was used for the Everand subscription. I don’t know what I could have done better at, besides what I have already mentioned.
There are lots of other “best practices” that can help prevent you from being a victim of fraud, so I want to talk about those too. Hopefully by following these fraud prevention measures you can avoid experiencing the extremely frustrating and financially damaging fraud that is running rampant in our society.
Keep your mail safe
In the US, you can signed up for Informed Delivery with USPS and they will send you an email each day with scans of what will be delivered to your mailbox each day. When we put a new mailbox up, we opted for one that locks like this, so that our mail is more secure.
When I received my new credit card after this fraud experience, the new card came “ready to use.” There was no need to activate the card. Had someone stolen my mail, they would have my active credit card in their hands.
Have good passwords
Create a unique, secure password (better yet, a “passphrase”) for every financial account. Don’t repeat the same password on different sites. When available, opt for multi-factor authentication. Though it takes more time to log in this way, the safety is worth it.
Be careful on public wifi
Never sign into financial accounts when using public Wifi, like in a library, school, or airport. If you need to sign into accounts when you’re on these networks, use a VPN to keep you safe. In the past, we’ve used NordVPN.
Be suspicious of odd forms of payment or extreme urgency
No one legitimate will ask you to pay for a normal purchase with a gift card, crypto, or a wire transfer (a wire transfer is possible for major, large purchases). Also, having a stranger request immediate payment or payment via a peer-to-peer app (Venmo, Zelle, etc) over the phone is a red flag for sketchiness.
Use common sense and verify facts
With AI imitating voices, it’s hard to trust that the person on the other end of the phone is actually your family member who is requesting immediate financial help. Don’t believe far-fetched, out-of-character pleas for help.
Don’t click links in emails or texts that claim to be from your financial institution
If you need to contact your bank, use the website of phone number on the back of your credit or debit card. Never click links in unsolicited texts or emails, as they can take you to sites that will steal your information and take advantage of you.
Freeze your credit
It’s free to put a freeze on your credit. This prevents new credit accounts being opened in your name. You can unfreeze your account when you plan to do something where your credit report needs to be accessed, like applying for a mortgage or credit card.
Stay on top of your finances
Look through all of your bank and credit card statements each month to make sure that you recognize all of the transactions and amounts. If you see something that doesn’t look right, first talk to your partner or anyone else with a connected card or account, then contact the financial institution if you still don’t recognize the charges.
Please do what you can to protect yourself and your loved ones from fraud. Fraud, especially the kind that preys on the elderly or other vulnerable populations, makes me so angry!
How about you?
What experiences have you had with fraud that we could all learn from?
What other tips do you have to avoid being a victim of fraud?
We had an elaborate fraud attempt. They claimed they were calling g from the fraud department, had all my husband’s info, were verifying if he had created a new account associated with his debit card. (That was the first red flag, because my husband doesn’t have a debit card in his name (long story).) So then when he confirmed that no, it wasn’t his account, the guy started talking about being eligible for FDIC insurance as a fraud victim (red flag two; that’s not what the insurance is for). We hung up before he got to the hook, which presumably would have been either a deposit payment or handing over banking information. Husband called the bank directly and confirmed there had been no activity, but it was pretty convincing at first!
Someone recently did several Walmart transactions right in a row on my credit card. Luckily the credit card company flagged it and sent me an email and a text to check. I was able to find a fraud report right away because of that.
Not fraud but I accidentally had two subscriptions to a streaming service under two different emails. I caught it the first month because of using YNAB and was able to cancel one of them.
File a fraud report, not find.