Tiny Charges Often Precede Big Trouble
Security experts advise consumers to keep a close eye on their bank and credit card statements, and for good reason: Small, unauthorized charges often are the first sign that thieves have made off with your account number and are getting ready to sell it to other crooks or use it to rack up thousands of dollars in fraudulent purchases.
The Boston Globe writes this week about one such scam, which shows up on consumer accounts as 25-cent charges to a mysterious company called Adele Services, supposedly in New York.
From that piece:
Two theories of what is going on have advanced on message boards and among consumer advocates: Someone is trying to find out whether an illegally obtained credit card number will work before making a bigger charge, or they're trying to rip off tiny amounts from tons of people.
The latter theory has more credibility at the moment. The Better Business Bureau in Louisville reports that, at least so far, those who have been hit with the small charge have yet to get slammed with a bigger charge. The bureau speculates that the number of possible victims could be in the millions.
I disagree that these fraudulent charges are being orchestrated by someone trying to make tons of money by charging tiny amounts to millions of people. Rather, most likely, these charges are the result of an underground service offered to cyber crooks. Online thieves who traffic stolen credentials usually like to test whether an acceptable number of credit/debit card account numbers they're about to purchase are valid and still active. If the tiny charges go through, the thief knows the account is still active and can be used for fraud.
This is not unlike what real-life criminals often do when they steal someone's physical credit or debit card, which is to run down to the nearest gas station and swipe the card at the pump to verify the card hasn't been reported stolen before running off to drain the account at the local electronics depot.
If you spot unauthorized charges on your account - no matter how small - it's a good idea to notify your bank. Odds are better than even that your account is compromised.
January 12, 2009; 7:15 AM ET
Categories: Fraud , From the Bunker , Safety Tips
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