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Fraud Victims Stress Importance of Taking Action, Staying Vigilant

June 24, 2015
Personal Finance
Fraud Victims Stress Importance of Taking Action, Staying Vigilant
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Kevin Matthews, a 25-year-old financial advisor in New York, knew something was amiss when his debit and credit cards were rejected at his university’s bookstore five years ago.

“I went back to my dorm room right away to figure out what happened and noticed several purchases for things that I didn’t buy,” Matthews says. “So that let me know that something was up.”

Matthews had fallen victim to identity theft. Criminals hacked his bank account and used his debit and credit information to make unauthorized purchases, a fate experienced by 12.7 million Americans in 2014, according to Javelin Strategy & Research. Matthews and victims have tips to share on what to do about identity theft and fraud.

Sound the alarm immediately

“I called my bank right away to figure out what was going on,” Matthews says, adding that he had immediately logged in to his online bank account after getting home that day. He saw that crooks had purchased speakers at Best Buy, teeth whitening products and many other items on predominantly foreign websites.

“I couldn’t even pronounce a lot of them,” jokes Matthews, who graduated from Hampton University in Virginia.

But he didn’t consider it a laughing matter at the time, which may have made all the difference.

“My bank canceled everything right then and there,” Matthews says. “Luckily I had an extra bank account that I used to hold me over until I got a new card.”

Although it took several weeks, he eventually got his money back, along with a different account number and new plastic. Matthews says consumers should respond quickly if they get caught in a similar situation, advice echoed by another victim of fraud, Beth Baumann, a 23-year-old public relations professional in Perris, California.

Hacked on payday

Baumann, a student at Northern Arizona University at the time, had just received her salary via direct deposit for her part-time job. But after checking her account again in a few hours, she saw that it was empty. Baumann noticed that a $500 charge had been made in Australia, which she found odd considering that she’d never been abroad.

“They basically wiped out my entire paycheck,” Baumann says. “So I’m freaking out, because I’m like, ‘I have bills to pay!’ ”

Like Matthews, she called her credit union immediately. Baumann described how much money was missing as well as what the transaction looked like in her account. The customer service representative confirmed that the transaction was fraudulent and initiated the refund process.

“Thankfully my credit union was really on top of everything,” she says. “They handled it great and got me my money back and reissued my cards in about five days.”

As was the case with Matthews’ bank, a small regional financial institution in Oklahoma, Baumann’s California-based credit union launched a formal investigation. The findings were inconclusive, although the fraud may have originated at her school’s campus dining services, which had previously seen a string of identity theft cases.

Offline fraud causes headaches too

Thomas Nitzsche, a 36-year-old credit counselor and media relations manager at ClearPoint Credit Counseling Solutions, an Atlanta-based agency with offices in 15 states, was in the midst of remodeling his kitchen when he was hit by identity fraud.

“My cousin was doing some work for me,” Nitzsche says, “and I had authorized him to use my Lowe’s store card to get anything he needed for the task at hand. About a month later, I got my statement and noticed a bunch of weird charges for like $300 each.”

Nitzsche’s cousin had been buying Lowe’s gift cards before selling them on the street to finance his drug addiction, which Nitzsche hadn’t known about at the time. The store wasn’t able to provide Nitzsche with a refund unless charges were pressed, which he initially didn’t want to do. But with quite a bit of money at stake, he couldn’t just let the incident slide, and so he authorized the store to press charges, which eventually led to a full refund.

“You would think you could trust somebody as close as your cousin with your card,” he says. “But you just never know. You’ve really got to pay attention and not leave cards with anybody.”

A valuable learning experience

Matthews, Baumann and Nitzsche all acknowledge that their run-ins with fraud have made them more cautious than ever.

“I take more proactive steps now,” Baumann says. “At gas stations, instead of using debit, I automatically run my card as credit so no one has my PIN number. And I never save my information online when websites ask to store my card number for future reference.”

Matthews says, “I check my accounts pretty often.” He stresses the importance of being on the lookout for unauthorized transactions of any size.

“In my case, it started off with really small purchases, like $2.45 for gum or whatever. Then all of a sudden they hit you with a big one,” he says. “So if you can catch the small ones you can really save yourself a lot of misery.”

Although financial institutions and retailers are busy fighting fraud, new cases crop up all too frequently. If you’ve been hit, try to keep your cool and reach out to your financial services provider immediately. It will guide you through the process and will do everything it can to get your money back.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @tonystrongarm.