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My Credit card was compromised - A short story and warning

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tshile

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So my american express credit card was compromised.

Which is funny because I just finished writing about this sort of thing here: http://www.bgobsession.com/showpost.php?p=132804&postcount=2
Specifically the shopping online section.

So I thought I'd make a thread to share the story, and to reiterate some things that I said in that post for those who saw the gigantic wall of texts I post in there and said 'No thanks'.

I noticed charges on my card in the last bill. Two of them, both to "WALMART.COM AR ...." The first was for $40 even, the second for $39.98.

I don't have a walmart.com account. I don't shop at walmart.com, hell I hate shopping at walmart the real store much less walmart the virtual store.
I certainly hadn't made any purchases from there in recent memory, much less two in the same week (6 days apart, last week), or for similar values.

So I immediately called American Express. The charges are in the process of being disputed. The great thing is that since I used a credit card I get to keep my money while the charges are investigated, this is counter to a debit card (which I explain the post referenced above) where you're out the money while:
a) the bank decides if the charges are fraudulent
b) the bank and merchant argue over who is responsible for the fraudulent transaction and try to figure out who should be reimbursing you (if anyone).

Now, it was only ~$80, so if I was out that it wouldn't have been the end of the world. But typically the way these things work is that person A steals your credit card information; they then run a few bogus charges against it for minimal amount of money to verify that the account information works without spooking you into canceling your card (hence a low amount charged to walmart. who doesn't shop at walmart? well, i don't... at least not regularly...). They then sell the information (in bulk. you're just one line in their text file of thousands of compromised accounts) in 'underground' hacker/criminal communities as 'Verified' (verified accounts are worth more than unverified) to person B who actually uses it for identity theft purposes (big charges). I was able to catch them before they could get to person B and was lucky.

So, if you are still using your debit card to make online transactions please consider changing your methods. The difference between credit and debit is where the money immediately comes from when the transaction is processed. With a credit card you have a safe buffer zone you can use to protect yourself in these situations.

To give you an idea, if I had paid for the charges and noticed them a month later I'd be in a much different boat in terms of leverage.

Side note:
When I called American Express the person on the other line 'wasn't sure' I should cancel my card and get a new one, due to it 'only' being two fraudulent charges. Do not listen to these people when they tell you this. If your card has been compromised it has been compromised. Don't wait for thousand dollar charges to start appearing before you cancel the card.

I'm not sure why anyone would be trained, or allowed, to make such a suggestion in such a situation.
 

tshile

Guest
One thing I forgot to include – I have no idea how my card was compromised. Maybe an online purchase, or a gas pump. In the northern VA/DC/MD area it’s become a pretty common crime for people to install skimmers on gas pumps, ATM’s, etc. So I only use credit cards anywhere now, for fear of having it 'swiped’ and stolen.

I finally convinced my wife that using a debit card, in general - online or in real life -, is just not worth the risk.
 

Lanky Livingston

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I had a replacement CC stolen from the mail once, and then they racked up a few thousand dollars in charges. I'm still not sure how they even activated the card, but they did somehow. Its the one thing I was grateful to BoA for; they were very quick about refunding the money and canceling the charges.
 

Fear The Spear

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What if you don't have a credit card, but only a debit card ?

I have heard it's "safer" to have a debit card processed as the "credit" option, rather than the "debit" option .

Is that really true ?
 

tshile

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Come to think of it I don't think I know anyone who's had a BofA account compromised. It's refreshing to hear you didn't have any hassle with your incident though. Banks are notoriously bad when it comes to this stuff, although I don't know how stolen card being issued compares to numbers taken from an online purchase.
 

tshile

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What if you don't have a credit card, but only a debit card ?

I have heard it's "safer" to have a debit card processed as the "credit" option, rather than the "debit" option .

Is that really true ?
that depends. i know at stores you can choose between the two, but I'm not aware of being able to do that online.

if you're only choice is a debit card then you have two options:
1 - get one of these gift cards that act like credit cards and load them up. this is probably and inconvenience for most, and you'll pay charges to activate/keep it.

2 - make sure whatever account your card is tied to has little money in it. don't keep anything more than you're comfortable losing (hopefully only temporarily) at any time. this may require you to reorganize how your bills are done.

those would be my suggestions. #2 probably makes the most sense for most people.

you can also consider paypal, but i cannot recommend them as I stopped using them 8 or so years ago.
 

Nobody

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t, I posted a very similar story a few months ago. Most likely you were the victim of either a pocket skimmer or a mounted skimmer. I had to invest in a skimmer proof wallet afterwards, because I am almost 100% certain someone got me with a pocket skimmer.
 

renaissance

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What if you don't have a credit card, but only a debit card ?

I have heard it's "safer" to have a debit card processed as the "credit" option, rather than the "debit" option .

Is that really true ?
I just recently started using a credit card which is separate from my debit card. I was really hesitant to do this initially, because whenever I opened credit cards in the past I was definitely spending more money than I would have had I just been using a debit card.

So this time around I got a credit card through the same bank as my checking/savings. When I go to check the balance on one account, I see the balance on all of my accounts. This makes it much easier to track spending and make sure I'm not going overboard.
 

tshile

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Fear, I realized I didn't actually answer the question. Yes, the credit option is safer than the debit option if you have a problem, with one caveat.

That is, it depends on how fast you catch the problem. Even though the transaction is processed as a credit transaction, part of the relationship between the credit agency and your bank (at least in my experience) is that you don't actually get a bill - the money is just 'transferred' (if you will) to cover the credit charge.

So, if your card got skimmed when you ran it in credit mode, and they ran charges against it as a credit card, and you caught them as 'pending' during the 3-4 day (or whatever it is) period where they post as credits prior to the money leaving your account, you would enjoy the same protection as a full fledged credit card*.

If you caught them a week or two or three later when your monthly report arrived in your mailbox the money is already gone out of your checking account, and now you're in the dreaded situation of being out the money until the bank completes its investigation; even then the merchant has it's money so for you to get yours back it has to come out of the bank's pocket, and they don't like doing that...

* you need to check the policies with your bank/credit card company, they may still force it through. i've seen it still go through, but it was apparently due to incompetence by the person on the phone working for the bank, not the policies.
 

China

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Last year someone swiped our CC info when I did a transaction with someone using a portable card scanner. Fortunately our CC company called us when the first suspicious transaction occurred and we were able to cancel it and get new cards issued. No harm done and I was impressed with the security of the CC company picking up on the transaction that was suspicious.
 

Elephant

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Well, let me ask you guys this...

They have these new scanners available for your smart phones. Would any of you actually let a company swipe your card through it?
 

Lanky Livingston

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I have, at a crafts festival. Maybe its dumb, but this the modern age. IMO at some point we're going to do away with currency altogether, might as well get used to it now.
Posted via BGO Mobile Device
 

Elephant

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I still pay with cash for just about everything. I know the use of currency is on the decline, but I will use cash until it is no longer in circulation. Not sure that will happen in our lifetime, but I will use cash as much as I can util then. I make 85-90% of my purchases with cash.
 

Lanky Livingston

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I'm pretty much the opposite, I rarely have cash, and probably make 90% of my purchases with a CC.
Posted via BGO Mobile Device
 

Elephant

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Yeah, I know it doesn't really matter that much anymore, but I just don't like the idea of my CC company tracking my spending habits. Not like I spend on anything out of the ordinary, I just don't need them to know what groceries I eat, the magazines I read, the clothes I wear... I think you get the point. Just kinda anal about stuff like that.


Edit: But I will give out too much info about myself to a bunch of strangers on a Message Board... :laugh:
 

tshile

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I'm pretty much the opposite, I rarely have cash, and probably make 90% of my purchases with a CC.
Posted via BGO Mobile Device
Same. More like 99.9% of my purchases are on the credit cards.
I pay them off 100% when the bill comes every month. So i get 3% cash back on some purchases and 1% on others on my AMEX every 3 months, pay 0% in interest/penalties/fees. All my bills auto-bill my AMEX as well.

I got 200$ back in the last quarter, and used it to buy a Kindle Fire. Thats how much I put on Amex. I get so much free crap just for using that card :)
 

Elephant

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And you get compromised by potential thieves... ;)
 

Lanky Livingston

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Same. More like 99.9% of my purchases are on the credit cards.
I pay them off 100% when the bill comes every month. So i get 3% cash back on some purchases and 1% on others on my AMEX every 3 months, pay 0% in interest/penalties/fees. All my bills auto-bill my AMEX as well.

I got 200$ back in the last quarter, and used it to buy a Kindle Fire. Thats how much I put on Amex. I get so much free crap just for using that card :)
I have a miles card; saving up miles for a free trip to Thailand. Once we have enough for that, I will probably switch to a cashback card like that one.
 

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