Monday, November 23, 2009

Scam Proof Your Life

Scams are scary and scammers are getting to be more sophisticated. The culprits could be your own bank. We need to stay one step ahead of them.

Have you ever heard of "negative option" marketing? It’s when a merchant or institution sends you some kind of notification either by telephone, mail or e-mail for some charge, such as bank-branded insurance. If they don’t hear back that you do NOT want the service, they will begin automatic premium withdrawals from your account.

We received such a charge. We had sold a piece of undeveloped property and payments came from a collection agency. After many years of regular payments, there suddenly appeared a charge for "buyers insurance." I called and asked what that was and learned that the charge was for investigation to see if the buyer had insurance on the property he bought from us. I remembered seeing that offer in the mail, but I didn’t care if he had insurance or not so I discarded it. They took that as a "yes" and proceeded to charge for the investigation. I called the customer service number and told them to remove that charge and never charge me for anything without my permission. I’m sure I was talking to someone in India, but he could speak and hear English adequately. In any event, that charge was removed and there were no more charges.

Unfortunately, these practices are legal in many states as long as certain notification rules are followed.

One way we can combat charges of this nature is to carefully examine what most of us consider "junk mail." But who has that kind of time?

I think the most practical way to ensure you don’t get unwarranted charges is to take a few minutes to carefully go over every single item on your credit card bill, checking account, or any account where a financial institution has the ability to charge you.

It’s a good idea to save all receipts so that you can reconcile your bank or charge account statements. A few receipts might get by you, but at least make sure you recognize the store and assure yourself that a purchase at that establishment was possible.

Merchants and financial institutions are counting on you just looking at the total amount due and paying it. Let’s not play their game.

Once we received an item on our charge account for shoes bought in Wisconsin from a Canadian account. We called and said that was not possible and the charge was removed. Again, it paid (literally!) to carefully go over our bill.

Another, more scary time, I noticed three charges for the same place for an amount totaling $750. Their 1-800 phone number was listed and I called and listened to a recording with the message to leave my phone number and credit card number! I don’t think so. Their website was also listed on the bill, so I went to that and found it was a foreign video store. I promptly called our credit card company and had those charges removed. Because it appeared our account had been compromised, we had to go through the hassle of opening a new account.

Then there’s a more recent scam we need to watch for. A caller identifies himself as a representative from a credit card company. He has all your information–name and credit card number but needs the 3-digit PIN numbers shown on the back of your card. He claims it’s for security reasons, to make sure you have your card and that it hasn’t been stolen. Don’t give out this number! The only time you need this number is when you’re making an Internet or phone purchase.

Here are some scam-preventive suggestions:

– Save all charge/debit card receipts
– Match your credit card charges with receipts, or at least be able to recognize the store where items were purchased
– Use your credit/debit card only at reputable stores
– Carefully reconcile your bank statement each month to justify every check and charge
– If you have an unsolicited charge, immediately call your bank or credit card company. Customers only have 60 days to dispute charges on mailed statements
– Beware of free offers–they are often negative options
– Insist on a written contract before agreeing to buy anything on time.
– Only give out your credit card number and the 3-digit PIN when making an on-line purchase.
– When you no longer are using a charge account, formally close it. Just not using it any more still leaves the account open.

If you believe you’ve been scammed and want to file a complaint, go to the Attorneys General website,

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