Last weekend after the excitement of my daughter’s college graduation, I sat down to pay some bills. I pay bills at least two times each month to avoid any chance of late payments and to keep track of spending because we don’t use a budget. Since we currently have three primary residences and self-manage our rental properties, we have plenty of bills to pay!
We pay for Netflix, our cell phones, our highway toll pass, and a few other bills through auto-pay on a credit card. And we have our credit card bills on auto-pay from our bank account – even though I always pay them off a few weeks ahead.
I go in and pay other bills online and we have payments for things like health insurance automatically deducted from our bank account. We even have to mail a few paper checks to pay bills each month…
We use a number of different credit cards each month for travel hacking (miles and points) purposes. Two of my husband’s credit cards are in “sock drawer” status right now (accounts are open but we haven’t used them in the last six months.) We keep them open to keep our credit score high and they don’t have annual fees. And we keep them in a safe place.
But when I went in to review his credit card statements to pay the bills, I realized that there was a charge on a “sock drawer” card. There hasn’t been a charge on that card for six months, so it was an easy charge to notice.
The $173.28 charge was to an online health/wellness store. With the cards safely tucked away and no bills auto-paid through that card, we knew that this was an unauthorized or fraudulent charge. It was likely that the fraud that took place on our account was a CNP transaction (card not present) and the number was used online or over the phone.
It’s been a rough year for hacks! First my website and now a credit card…
When I called to report the charge to the credit card company, I told them I was surprised I didn’t get some kind of fraud alert. I also told them that the card was in our possession and hadn’t been taken out of a drawer in 6 months. They took a report, closed the account and said they would send a new card in a few days.
And since I hadn’t run my credit report in over a year, I went to AnnualCreditReport.com and ran a free credit report from all three of the credit bureaus (Experian, Transunion, and Equifax). You can do this once a year for free! Luckily everything looked fine there too.
That wasn’t too surprising because we followed Clark Howard’s advice and froze our credit two years ago. Freezing your credit doesn’t stop someone from putting fraudulent charges on your credit card but it should stop any new accounts from being opened (if they require credit checks).
We’ve “thawed” our accounts a few times to get new credit cards and for a change from landlord to homeowner’s insurance. But we sleep better at night knowing that it would be much harder for someone to open up a new account without our knowledge.
It took about 45 minutes of my time to deal with this whole situation. But it’s not the first time we’ve had a credit card hacked. This is third time in about 5 years. The other two hacks were for smaller amounts of money (“micro charges”), but they took up WAY more time because they were on cards we used for auto-paying bills. We had to go in and change credit card numbers and make some phone calls to companies with the new credit card numbers that we were issued.
And from what I’ve read, we’ve been hacked less than some people with credit cards! The 2016 Nilson Report showed that credit card fraud losses reached almost $22 billion!
I’m just glad we weren’t too busy to notice this credit card hack – especially since all of our cards are on auto-pay and we charge almost everything we buy. Skipping a thorough review of our statements could cost us a lot of money and time! And I’m now re-thinking setting up bills on auto-pay.
I put out a Twitter poll and with 34 votes, 68% of you pay online but NOT with auto-pay. I might need to just add online bill paying to my calendar and skip the auto-pay (unless there is a big discount) so that we don’t miss unauthorized charges. (I shouldn’t be too busy to do this especially since I’ll be leaving my full-time job in 38 days! Really – it’s getting so close now!)
A few of you also commented that you use apps like Mint or Personal Capital to check your credit card statements every few days. I’m not sure I want to think about my credit cards that often – but maybe it’s an option I should consider!
46% of Americans have had their card information compromised at some point in the past 5 years according to ACI Worldwide (an electronic payment systems company). Are you one of the lucky ones or have you faced some kind of credit/debit/gift card hacking in the last 5 years?
If you’re credit has been compromised – was it a “micro” charge or a larger charge like ours? Or was it for even more?? Did you notice it or did you get a fraud alert? Did you go and check your credit report too? Anyone face identity theft?
According to my insurance company, they’ve only had one other client who has talked about using a credit freeze. Why are people not taking advantage of freezing their credit? We froze both of our kids’ credit files too!