Editorial Policy

Monitoring Services Watch for Credit Leaks

Eva Norlyk Smith Ph.D.

August 30, 2012

How closely do you look at your credit card statements each month?

If you don’t have time to go over them with a fine-tooth comb, there are a number of services that promise to keep an eye out for threats like identity theft, billing errors and sneaky subscription charges.

A lack of vigilance can cost you
Too often, cardholders scan their bills quickly, checking only the large charges. If a small, unknown charge does catch their attention, they don’t always have the time to follow up to find out if the charge is legitimate. Scammers know that, and tailor charges accordingly. A few trivial “test” charges then become a flood of large fraudulent charges once the thief determines the cardholder isn’t paying attention.

“These types of charges are usually designed to be smaller in nature so as not to catch a consumer’s attention,” says Mary Anne Keegan, chief marketing officer of BillGuard, a company that has developed proprietary software to alert consumers about deceptive charges. “In fact, our research shows that nine out of 10 users do not read their statements as closely as they could, so it is easy to miss a small deceptive charge.”

Fraudulent charges from identity thieves aren’t the only thing draining your account. There are also under-the-radar charges you might miss, such as billing errors or subscriptions you didn’t realize you signed up for.

“On an annual basis, about 5 percent of American cardholders are victims of fraud, but almost everyone is a victim of a bad charge or billing practice,” says Keegan in an email. “Many consumers sign up for goods and services where they are deceived into thinking that the product is either free or fail to understand that they will be automatically billed for accepting an offer.”

Bill and credit monitoring services
How can you protect yourself? The first line of defense is to simply be alert. Read the fine print carefully, especially when shopping online, so you are aware of the terms to which a purchase commits you. Scan credit card bills and debit card statements carefully each month for charges you don’t recognize, and follow up on unwanted or suspicious charges, no matter how small.

However, even the most cautious consumer may inadvertently sign up for a service that leads to unwanted charges — or even fall victim to credit card fraud. A growing number of online services offer additional protection, in some cases at no charge. Here are a few to consider:

BillGuard: BillGuard is a relatively new company  offering an innovative type of credit card protection. While traditional identity protection services focus on detecting fraud, BillGuard alerts consumers to deceptive or unwanted charges like misleading subscriptions, hidden fees, billing errors and scams.

To identify these types of charges, BillGuard analyzes millions of billing complaints posted online and reported to banks, identifies common patterns and alerts you if similar charges appear on your bills. BillGuard also features a user community, where users share information about transactions and merchants and collaborate in protecting each other from bad charges.

Cost: The service is free for up to three credit cards. If you wish to cover more cards, you can enroll up to 10 for $79 a year. To sign up, simply register your credit cards on BillGuard.com, and you will be alerted in real time to suspicious charges (no need to wait for your next credit card bill).

If you are concerned about full-scale identity theft, however, using a service that scans your credit card bills may not be enough to detect the extent of the damage. So consider enrolling in an identity fraud protection or credit monitoring service. Instead of keeping an eye on your bills, identity theft protection service will monitor your credit reports on an ongoing basis and help provide recovery and resolution services should you fall victim to scammers. Here are some services to consider:

Identity Guard: This service provides ongoing monitoring for fraudulent credit applications submitted in your name, including store credit cards, mortgages and loans. The service’s proprietary software scans the Internet and online black markets and alerts you if your Social Security number, credit cards or bank account numbers are found in non-secure online locations. Identity Guard also monitors your credit report and will alert you by email to changes that require your attention. An added bonus are the quarterly credit updates, which include three credit scores based on data from the three credit rating agencies.

Cost: $14.99 a month per household member covered.

TrustedID: TrustedID delivers services similar to Identity Guard’s, alerting you to suspicious changes on your credit reports with the three major credit bureaus. Like Identity Guard, the service scans the internet for unauthorized use of your personal information, and you get online access to not only your credit reports, but your credit scores as well. Users also get a personalized Identity Threat Score, which gauges their individual risk for identity theft by monitoring information in public and private databases not included in credit reports.

Cost: If you wish to protect all members of your household, TrustedID offers one of the best-priced identity protection services — $18 a month for a full household, if prepaid for a full year. An individual plan is $9.38 a month if prepaid for a full year.