Check your statements

by Philip Brewer on 31 October 2008 14 comments
Photo: Philip Brewer

If a bogus transaction gets posted to your bank account or credit card, you have almost complete protection--just notify the bank that the transaction wasn't authorized and they have to give you the money back plus interest.  The catch is that you have to notify the bank promptly--typically within 30 or 60 days--after they send the first statement that shows the error.

If you think about it, this is incredibly powerful.  If it weren't true, any money that you deposited in the bank would be vulnerable to being snatched away by fraud or by error.

Unfortunately, a lot of people don't bother verifying their statements.  This is kind of understandable--I've received thousands of bank and credit card statements over the years, and I can count the number of errors on one hand.  Scrupulously checking each one can seem like quite a bit of effort for not much return.  Still, an uncaught error can cost you hundreds or thousands of dollars pretty quickly.  Worse, it's common in certain kinds of fraud cases to make a very small charge and wait to see if it's detected.  If not, the fraudsters can start adding on charges with some confidence that they won't be caught.

I attribute part of my good luck in avoiding fraud and errors to careful checking of statements.  It's worth the trouble.

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Richard

Another "safety" precaution is to setup email alerts on your accounts. I'm not 100% about other banks, but Chase allows me to setup an email alert for a lot of account activities. For example, I receive separate alerts if any of the following occur: 1) deposit to an an account, 2) ATM withdrawal of any amount, 3) transfer btw accounts, etc. I set the alert threshold at $0.01.

If I receive an alert about a transaction that I didn't initiate, it would be time to call the bank.

Guest's picture
Guest

If you take 2 minutes a day to write down in a spreadsheet (or Quicken, or whatever) the amounts you put on your credit cards that day, then checking your statement at the end of the month is simply a matter of asking, "does their number match my number?" If it does, then you're done. If not, that's when you bring out the fine-toothed comb.

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pinkyblue

my parents had an account with the local bank in our small town, and they could NEVER get their checkbook to balance. turns out, one of the employees was withdrawing small amounts from everyone's accounts. it may not happen often, but it happens.

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Marnie

Excellent point. A friend of mine checks her statements religiously... And this month she discovered she was paying a perfect stranger's student loan! It was a bank error, not fraud.

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Guest

Yes, check your credit card statements carefully! This month I had three fradulent charges, two that were $1.00 each and one for $12.95. Apparently there are identity thieves who charge tiny amounts, which are less likely to be detected and reported.

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Brian

I once detected a significant withdrawal from my bank account (like, 4-digit significant) that I did not initiate. The withdrawal occurred from a point of sale in another city which I had visited some months earlier, where my careless use of a public Wifi spot must've exposed my account information. A prompt call to the bank saved me a bundle. And my hotspot practices are now much more secure.

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Mandy

I'm nodding my head in agreement! A few months after my husband and I were married, a mysterious charge of only like $17 showed up on one of our accounts at a store that we never shop at. I called the bank, and they are the ones that said we needed to close our acocunt and open a new one because this type of fraud (taking only a small amount to see if anyone notices) was just starting to catch on. That experience several years ago made a believer out of me!

Philip Brewer's picture

Thanks to all the folks chiming in with real-world examples showing why checking your statements is worth doing!

Guest's picture

Several years ago there was an error on one of my credit card bills. The charge was legitimate, but the amount was incorrect. I ended up calling the credit card company and they got working on it with the vendor. The vendor, a restaurant, ended up apologizing later.

Goes to show, it pays to check and review your finances regularly. Everything you hold important in your life should be reviewed regularly as well. It goes for relationships, finances, career direction, business, web browsing habits, blogs :-P, you get the point.

Guest's picture

I still use and balance a check register - it helps me to keep from overspending, and it helps me to review my online statements effectively. Maybe it's old-fashioned, but it works.

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Cindy

A few years back we had our own tractor trailer. We filled it with a company debit card. This could be a few hundred dollars every few days and in various parts of the country. Fortunately we logged in every purchase as we did it, and we reconciled our records with the bank statement on line, so even before it came out monthly.
There was an extra 360.00 purchase at a fuel stop we did go to when we went thru Northern Pa. It would ahve been so easy to think that we just forgot to turn in a receipt. But I felt we were pretty anal about logging everything in.
I had to go back, check the log books and see our truck was not even in that area at the time of purchase. And we found out that the fuel attendant had copied down our information from our card, and then logged in a bogus purchase.Our bank gave us a temporary type credit, as it was investigated, but it took some effort to prove our case. I copied the receipts, showed the log book that showed we were not there. In the end we succeeded in catching this person. But this was an easy way for a dishonest person to try to scam the truckers. Cindy

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Ms. Ferret

I do a weekly check of my credit card statement online (to track my spending, since I put 95% of my purchases on the card). Back in March I caught several unauthorized uses of my credit card number the day they occurred -- just because I happened to check my statement online that day.

Since then I've enabled a number of alerts on my credit card. Whenever I make a purchase over a certain amount, I get an email alert. Whenever I make a purchase overseas, I get an email alert. Best of all: whenever I make a purchase that does not involve a physical card swipe (online, phone, mail), I get an email alert pretty much instantly.

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Kristina A.

Nowadays, we should be consistent in checking them. We should be keeping track of account activities. Either you keep a handwritten record of transactions using the register that comes with your checks or use a software program, such as Intuit's Quicken or an online version of any of the financial programs there is. The point is to have a record of every check, deposit and electronic fund transfer that's involved with the account.

BTW, I found this survey about the current economic downturn and I think it’s helpful to get involved.
http://spreadsheets.google.com/viewform?key=p-XlwgJysoV-gV-D6-1d_XQ

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Rachel

I check my account regularly online, at least once a week, sometimes more. This allows me to catch anything fishy or out of the ordinary. So far this year, my bank cashed the same rent check twice causing me to be overdrawn. They noticed their error and redeposited the 2nd withdraw, however, they did not take back their overdraft fee! Just this week I went to the bank ATM to take out $40, the ATM was out of money yet the $40 was still showing up in the statement.

The problems, though a pain, were easy to fix. The check issue I had remedied by phone and the $40 ATM I sent an email through their secure server. Both were fixed within a few days.