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You notice a small charge - maybe $12.95 - on your credit card statement. You don't recognize the merchant. Maybe you assume your spouse used the card and forgot to tell you, or you just chalk it up to your own forgetfulness. If you are like many consumers, you just pay the bill when it's due and don't give it a second thought.

Now suppose you're the suspicious type. You look up the merchant on the Internet and find a website that offers a work-at-home plan, or some "web services." You know you never purchased anything from them, so you send an email to the address listed on their customer support page asking why they charged your credit card. Soon after, you receive a canned email response that states they will refund the charge - and they do!

All is well, right? It was just an honest mistake. Or was it? The question remains: How did they get your credit card number?

Chances are, it was no mistake at all. The "company" that charged your card probably bought your credit card number along with thousands of others from a dealer in stolen information. Their intent was to charge every credit card on the list the same small amount. Their intent was to commit fraud.

The scam is very simple. Let's say they charge $12.95 to each of 10,000 stolen credit card numbers. Now let's imagine that 75% of the stolen card numbers are valid. Of those 7,500 fraudulent charges, suppose that 5,000 of the owners of those cards request a refund, either directly through the bogus company or by disputing the charges with their credit card companies. That leaves 2,500 charges that go unnoticed - a whopping $32,375.00!

The consumers who got their refunds are satisfied, the consumers who were ripped off don't know or don't care, the credit card companies are happy to settle, and the crooks get away with a big profit.

How do I know all this? Because it happened to me. I wasn't satisfied with a refund, though. Instead of just disputing the charge through my credit card company, I requested they investigate it as a fraud charge. Then, with a couple hours of time and my good friend Google, I was able to find out the name of the owner of the bogus company. I kept going, Googling his name and his company's name. I found that he was a former lawyer who had been disbarred by his state bar association. Not surprisingly, he also had criminal charges pending for identity theft. In short, he was a low-life, who thought he could stay under the radar.

I filed a criminal complaint. My complaint didn't result in charges, but it got him noticed. Eventually, he was indicted for an unrelated mortgage scam and will probably be checking into prison soon. My complaint by itself wasn't enough to stop him, but it helped put a spotlight on him from which he couldn't hide.

Was my time and effort worth it? After all, I had already gotten my $12.95 back. I think it was worth it. For one thing, I enjoyed being an amateur sleuth. I was amazed to find out how much you can discover about a person from public records available on the Web. More importantly, I probably saved a few thousand people from having to deal with the inconvenience of requesting a refund.

So the next time something looks odd on your credit card statement, take a few minutes to investigate. You may think it's simpler just to get your refund from the credit card company and drop it, but eventually you, and all of us, will pay in higher credit card costs.

Learn more about this author, Gregory Gordon.
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