Watch Out For Tiny Fraudulent Charges On Your Accounts

The new hot fraud these days involves something that kinda sounds like it belongs in Superman III, but is new and different. Scamsters make tiny charges to tons and tons of accounts, hoping that the account holders won’t notice a charge for less than $10. And often they don’t.

From the FTC:

More than a million consumers were hit with one-time charges of $10 or less, and their payments were routed through dummy corporations in the United States to bank accounts in Eastern Europe and Central Asia.

The defendants, using phony company names resembling real companies, and information taken from identity theft victims in the United States, opened more than 100 merchant accounts with companies that process charges to consumers’ credit and debit card accounts, according to the FTC complaint. The FTC believes the defendants may have run credit checks on the identity theft victims first, to be sure they were creditworthy. The defendants also cloaked each fake merchant with a virtual office address near a real merchant’s location, a phone number, a home phone number for the “owner,” a Web site pretending to sell products, a toll-free number consumers could call, and a real company’s tax number found on the Internet.

FTC Obtains Court Order Halting International Scheme Responsible For More Than $10 Million In Unauthorized Charges On Consumers’ Credit and Debit Cards [FTC]


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  1. FatMagic says:

    Yep had this happen to me! I have NO clue how my card number got grabbed, but on one hand I’m not surprised because I use it for tons and tons of work purchases. The charge came from a “WWW.THE1ELECTRONICS” and it was for $10.91 — I never made a purchase from them, and doing a quick Google found out that others also had small $10 charges for the same amount! I closed the card, and got a new number. That was that! Unfortunately the replacement card was $10… but at least they won’t be making any more charges to that card.

  2. t-spoon says:

    Office Space!

  3. Tim says:

    Thumbs up their asses. Thumbs up their asses.

  4. Nighthawke says:

    The technique of the scam is called either penny shaving or salami slicing. It’s an old scan leading back to the 1920s and the rule of the mob. Hard to hide them when they are on paper. These days electronic transactions make it so easy to shave fractions off an account and get away with it. It takes a sharp eye and a good sleuthing program to spot the pattern and shut the jokers down.

  5. redskull says:

    Happened to me a couple of years ago. A $12 charge from some company I didn’t remember dealing with. A quick Google search of their name came up with tons of pages full of complaints against them for just this sort of thing.

    Called the credit card company and got the charge removed, although that in itself was an ordeal.

  6. nbs2 says:

    Under $10? Not if Congress has anything to say about that!

  7. TouchMyMonkey says:

    So what’s the best thing to do here, close the account? I’m on it.

  8. GirlCat says:

    It’s an enormous pain in the ass, but I keep copies/notes of all my receipts–including stuff ordered online or through iTunes–and check them off against my statement every month. I also scrutinize my phone and cable bills every month. It’s time consuming and I wish I didn’t have to do it, but it beats being scammed, I guess. I sometimes think I should’ve passed up the English degree and gone into forensic accounting.

  9. oneandone says:

    Similar thing happened to me about a month ago, except the charge was only $1 and was a donation to a church in Arizona. I don’t live in AZ and don’t send CC donations to anyone. I wouldn’t have noticed it since it was on a CC I rarely use and was only looking at it by random chance. I assumed it was a ‘test’ charge to see if they could scam larger amounts on my card. Luckily, there weren’t any past charge & the CC company was very quick about refunding it, cancelling the card, and putting a fraud flag on my other accounts.

    Watch out for these little things – don’t hestitate to call your credit card company if anything looks odd.

  10. ob1canobeans says:

    My CC company noticed 3 charges of less than $1 each and called to inquire; said the scam is to see if the charge goes through. If so, major charges follow. I had never heard of the companies attempting the scam and got a new CC number at the banks’ suggestion.

  11. sheriadoc says:

    This happened to me a few years ago. A noticed a charge for about $8 that I certainly did not make. I keep receipts and check my account online at least once a week. I called BoA and their first response was to ask me to call whatever company had made the charge and settle it with them. And I replied, I don’t know what this place is or how they obtained my credit card information, and I do not feel comfortable doing that. So, they took it off for me.

  12. MarvinMar says:

    I had a 1 cent charge on my account last Friday from a website I have never heard of. They do custom caricatures.
    My wife caught it, and we called to cancel the card. It was only a penny but we did not want them to then hit us with a larger withdrawal later..
    Took BofA till Saturday for my wife new card to come and mine still is not here.
    What a pain it is to go a week without your debit card.
    Was also a pint for netflix and some other companies who tried to charge our card during that time.

  13. DaWezl says:

    That happened to me in 2006. Some “lawyer” in the midwest tried to charge $1.80 to my bank card. I’m on top of my balances, so I caught it immediately. Impressively, my bank had already identified it as a potential fraudulent charge as well.

  14. Extractor says:

    In 2000 I was notified by that their systems had been compromised and that my credit card information may have been stolen. Sure enough a few days later I noticed a charge for $10.88 for Global Telecommunications of Moscow Russia. Since I was using Microsoft Money and downloading at least once daily, I saw it quick. Contacted bank, transfered to FBI, where card was taken over and new one issued for me. My friend got the same message from onsale but waited for his statement and had to fight $600 worth of fraudulent charges. I was supposed to sign some paper and return within 60 days for reimbursement but misplaced it and sent it in 4 months later and it was still credited to the account.
    In December I got an email that refered to a credit card that was reissued due to theft in 2004. Contacted bank, and was asked if I had charged anything from Queen of Hearts? Bank immediately terminated that account number and issued new cards. I had called for something else and the bank spotted it. Chase has been good with this throughout the years.

  15. thingsbuilt says:

    Two of the ‘bogus’ charges which came up on my HSBC credit card, within a year’s time,
    were from the bank itself. AccountSecure, and Identity Protection (I think?); each one
    charging 8-10 bucks a month, and without my consent. Takes a bunch of complaints to get them removed, but they eventually do, and refund you what has been charged (so far).

    The other three bogus charges, in a year’s time, came from scamsters, while I have been in
    Mexico. As much as I dread looking at my account balance, it’s better to do it than NOT
    to do it. (nothing like waking up to a “negative” $749 balance suddenly.

    I’m on my third card this year.

  16. Tiandli says:

    Earlier this afternoon, Chase called my girlfriend about a charge on her credit card. I was expecting it to be about an exercise machine she bought over the weekend.

    Turned out it was a 3 cent charge to some company in North Dakota. Chase canceled her account, is issuing her a new credit card, and asked her to check all her previous purchases for other unauthorized charges.

    If Chase hadn’t called, we would have caught it when the statement came in. I’m just glad Chase spotted it so there wouldn’t be any dispute over whether or not it was a fraudulent charge.

  17. sqeelar says:

    File a police report. Maybe the cop has had this happen to him, too.

    File a police report. Specially when that $10 charge is from a company linked to organized crime in Eastern Europe and is exquisitely documented on the web. So many exotic names of cities and countries with so few vowels. With 100s of banks involved.

    With a police report, the bank may then remove the charge, otherwise good luck because somehow the bank benefits from this situation.

  18. econobiker says:

    “The defendants also cloaked each fake merchant with a virtual office address near a real merchant’s location, a phone number, a home phone number for the “owner,” a Web site pretending to sell products, a toll-free number consumers could call, and a real company’s tax number found on the Internet.”

    More efficient than even some legitimate companies selling on the internet…

  19. dg says:

    Years ago, I get my credit card statement and discover a $9.95 charge from some company I’d never heard of – it happened on December 25. I knew I didn’t make a charge on that day because, as an IT geek, I was working – doing a forklift upgrade of a network switch/servers. So there was NO internet access where I was.

    I called the CC company – they took a look at the charge, and the rep said “just a sec, I’ll transfer you to fraud” – the Fraud rep told me that they’d gotten 200,000 of these charges. Apparently some clowns over in Russia just randomly created numbers and expiration dates and charged $9.95 to see what would stick…

    A lot of people figured $10? Must have been jimmy buying something for the ‘puter, and didn’t give it a 2nd though…

    Those little scams are yet another reason why they added the 3 digit codes on the back of the card…

  20. ThatsWhatSheSaid says:

    thanks to this letter, i have been checking my online statements way more then i used to. i religiously check them almost everyday just out of habit, but ive been paying more attention and just yesterday i noticed a $3.53 charge from some digital place in sao paul brazil, along with $41.00 in itunes downloads none of which i purchased. thanks to capital ones quick response, my account is now closed and i have to be issued a brand new card. this is a first time experiance for me, i too never thought this would happen to me. my reccomendation to every consumerist reader, as annoying as it may be, skim through every dollar on your statement, dont ignore ones that are even for as little as a dollar, why spend your hard earned money on some criminals wish list. thanks consumerist!