Credit Card Fraud: Watch Out for Small Charges

One of the ways that you might be defrauded out of money with your credit card is through small charges. You might overlook a small charge of $1 or $2 on your credit card statement, deciding not to look too closely at the charge. However, it's important to account for everything you spend, since you might be enriching a scammer. Make sure to balance your account statements each month, and be sure to ask questions about a charge you don't understand, or that doesn't match your records.

Lots of Little Charges Add Up to Big Money

Savvy scammers like to use little charges because it's so easy to get them to stick. If you have the credit card numbers of 500,000 people, and you do a small charge of $1 each, that's $500,000. Plus, if most of the victims don't notice, or don't think that $1 is worth pursuing, scammers can set up a recurring charge, so that every month that $1 is charged to your credit card -- and heads right into their coffers.

In many cases, scammers will choose an innocuous name to go with the charge. It might be a charity, or even the name of a legitimate institution -- or a name that is close enough that you are confused. In the case of a debit card, it can even look like you are being charged a small bank fee, even if you might not be.

The point, of course, is to take small amounts from large numbers of people. That way, few of them will take action (because it's not worth the hassle for such a small amount). It makes it easier to keep using the credit card number to make small charges in the future, and it can become a source of income for smart scammers.

Keep Track of Your Spending

It's important to keep track of your spending for just this reason. Reconcile your credit card accounts each month, and be vigilant about watching for signs of identity theft and credit card fraud. In some cases, scammers might be testing your credit card to see if it's "good." You can call your Canadian credit card company to explain your concerns, and a dispute can be filed regarding the charge. If you do this, scammers know that your card isn't that "good." And, of course, the money is a chargeback, so the scammers don't get it from you.

You do have to be careful, though. Make sure that you are disputing a charge you didn't make before you call in. You don't want to get in the habit of disputing legitimate charges, or that could result in more problems for you.

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