Shining a Spotlight on Dubious Charges

Supposedly, right angles don’t exist in nature.

Similarly, people seldom make purchases for even amounts.

So, the grocery/gas/dry cleaning bill is almost never exactly $40; rather, it’s $39.72 or $40.17 or some such.

“That’s Odd!” (Literally)

Consumers can use that phenomenon to help thwart credit card fraudsters who — somewhat counterintuitively — are more apt to sneak thru lots of illicit small charges on many accounts (the better to escape detection), than to make a smaller number of more conspicuous purchases.

The strategy?

When buying something, explicitly round to even amounts.

That way, when consumers review their monthly credit card statements (Note to consumers: always review your monthly credit card statements), they can easily spot the charges (debits) for odd amounts — and take action if there’s anything suspect.

Below the Radar

The foregoing recalls a story I heard when I was a CPA in California auditing banks (a long time ago), about a details-obsessed grandma who was adamant that her bank was short-changing her.

The problem?

Every 8 months, her checking account was out of balance by exactly 1¢.

When she repeatedly called to complain, bank officials dismissed it as a rounding error — and labelled her as a crank.

“Grandma” was ultimately vindicated when the bank discovered a multi-year fraud, totaling tens of millions of dollars.

The criminals’ m.o.?

Each month, they subtracted 1/8 of 1¢ from millions of customers’ accounts that they’d hacked into.

P.S.: Thanks to Edina Realty’s Jim Young for the credit card anti-fraud tip!

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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