FREE NEWSLETTER
IT ALL STARTED WITH a purchase alert. With so much account hacking, we have alerts on our phones for every new purchase, so we can immediately respond if there’s an unauthorized transaction. What we didn’t know was that disputing charges can be so Kafkaesque.
My wife Jiab asked if I had just purchased anything online from Walmart. I had not. There were two suspect charges, each for about $50, simultaneously charged to our Chase and Capital One credit cards. Chase required only a five-minute call for the charge to be reversed and removed from our account. Capital One said it was happy to tag the purchase as disputed.
We then called Walmart to stop delivery of the two purchases, but the representative said the goods had already been shipped and couldn’t be recalled. Strangely, both purchases were being shipped to us and not to another address, which is what we thought scammers would do.
Two days later, FedEx delivered the goods—two children’s jackets and a large dresser. I heard the thud of the delivery at our door late in the evening, so I ran outside in hastily donned sweats and socks. I told the FedEx guy to take them back as they weren’t our purchases. He said he couldn’t cancel the delivery before it was processed and that wouldn’t happen till tomorrow.
The next day, a second FedEx guy came to our door with another delivery, a legit one. He said the first FedEx guy lied and could have taken the stuff back but just didn’t want to. As for him, he couldn’t take them back because the fraudulent delivery was from FedEx Ground and he worked for a different division. He did explain that the scammers gave our actual address to not give away their location, and had probably planned to drive by and grab the goods from our doorstep.
Laden with unbought goods, we again called Walmart to take the coats and dresser back. We got caught in a phone loop because we weren’t calling about an existing order but rather ones we’d never made, and so they didn’t exist in the system. I had to run errands that day, so I decided to drop by the local Walmart.
The people at the counter were confused about what I was describing. The store manager never came to the front desk but called from somewhere in the back. Her disembodied voice said they were not set up for pickup and that I should call the Walmart helpline—again.
Returning home, I finally got a human being on the Walmart helpline who said he didn’t know what I should do with the stuff. I responded that I might as well donate the items. The phone agent’s “whatever” was a bit noncommittal, so I hung up and called again, this time asking for a manager.
The manager who answered was unsure of what to do, put me on pause, and then said as far as Walmart was concerned it was my choice. He thought that donation was a good idea.
We dropped off the jackets at a shelter and arranged to have the dresser picked up. Now given away and with receipts for proof, we were finally finished with the unsought goods. It was all slightly aggravating, but no harm done. Or so we thought.
A couple of days later, Capital One concluded its “investigation” and decided the charges were legitimate. The charge to our card would stand solely based on the goods being delivered to our address. We called and had a long back-and-forth with the agent.
We asked if he talked to Walmart or FedEx as part of the investigation. He said no. We asked if he’d like records of our calls to Walmart or our receipts for the donations. Again, the agent said no.
The agent then started talking in a condescending manner, saying, “Jim, let’s pretend we are lawyers, and let’s review the evidence we have together.” He then just talked about the shipping address.
At the end of his long spiel, I asked him if he was or ever had been an actual lawyer. He said “no,” after which I informed him that I had been a litigation attorney. I then proceeded to expel my built-up magma like he was Pompeii and I was Vesuvius. For good measure, Jiab asked him why, if we wanted to organize this whole scam, we’d do it for a measly $50?
He put us on hold and then came back to say his manager would be happy to look into it one more time. A couple of days later, Capital One notified us the charge was yet again deemed our responsibility to pay based on—wait for it—the sole fact that it was delivered to our address.
At this point, we laughed because we knew the hassle wasn’t worth any more of our efforts. We ate the $50, just glad that this was the extent of our loss.
Jiab called Capital One a couple of days later to cancel our card. When we explained that we weren’t happy with Capital One’s service compared to Chase’s, suddenly the agent was all too happy to immediately wipe out the $50 charge to keep us. How charitable, but a bit too late.
A large part of the problem we encountered is the convenience of automation. The system is designed for the path that life almost always takes. Goods delivered to your home? They’re yours. Try to go out of your way to give something back that you didn’t pay for? Sorry, that’s too uncommon and we don’t know how to handle it.
A friend of mine once got a $100 bill among the $20s she expected at an ATM. She went inside the bank to return the $80 overage. She sat for a long time as managers huddled and re-huddled till they said they had no procedure to account for it. They said she could do them a favor and just keep it.
Jim Wasserman is a former business litigation attorney who taught economics and humanities for 20 years. He’s the author of a three-book series on how to teach students about behavioral economics and media literacy. Jim lives in Texas with his wife and fellow HumbleDollar contributor, Jiab. They have a two-book series coming out in 2023, Behavioral Economics: A Guide for Youth in Making Choices and The Social Media Diet: A Guide for Young People to Be Smarter Online Users and Consumers. Check out Jim’s earlier articles.
Want to receive our weekly newsletter? Sign up now. How about our daily alert about the site's latest posts? Join the list.
One night I received a text that over $4,000 in fraudulent on-line charges at a Sam’s Club in the midwest was made. While I would still be sleeping in California, the criminals would have gone to Sam’s Club in the morning and picked up the merchandise. However, I was awakened by the text notification and immediately called Chase, who reversed the charges. What disappointed me was that the Chase Rep had no interest in contacting local police who could have been waiting to see who showed up at the store to pick up the purchase. These companies make such large profits they don’t mind absorbing fraudulent charges instead of aggressively going after criminals.
I once had about an $800 charge from a computer goods outfit I had bought from before, but had no idea about this charge. The CC company initially waived my charge, but then reinstated it when they determined the order was supposedly legit. The details are fuzzy, but I think they had goods delivered here, but the e-mail address used was not mine, and I thought I tracked some aspect of this to another part of the state. I called the police and attempted to file a report. I finally got the charges waived when I said I had called the police and had a case number. Very little of this ever made sense to me.
We are fortunate to have robust consumer protection in the area of limited liability for credit card fraud. But we cannot take this for granted; it was due to hard fought legislation.
We need to watch what goes on in Washington closely so this isn’t compromised.
https://consumer.ftc.gov/articles/using-credit-cards-and-disputing-charges
You just described a benefit of having a good credit score or assets on deposit, how the wealthy benefit. Credit cards will do just about anything to keep you. But if you don’t have this wealth, then you get stuck with charges that you are less likely to be able to afford. This is how the system is built. It’s not fair.
Every once in a while, I’ve had fraudulent charges on my card. First time was around 1994 when cards still used impressions with carbon paper. There’s always a scam for whatever technology is current.
Circa 2012 to 2015 my kids were on my Capital One card. There was constant fraud. The bank canceled all the charges, issued new cards, and we got hit again. The kids were in different cities buying different things. I switched them to other brand cards and the fraud stopped. Was this mere coincidence or something about Cap One in those years?
Will never use Capital One. Hubby had a problem with them over 20 years ago, terrible customer service. The Walmart situation is interesting in light of the recent story about them closing stores in Oregon because of them losing money.
I see Capital One hasn’t improved their customer service. Way back in 2012 I too was unsuccessful in getting a fraudulent charge reversed. Not only did I close my credit card account, I moved money out of the Capital One online savings account (which at the time had decent interest rates) and closed that as well. I vowed never to do business with Capital One again and have kept true to that promise. What’s in my wallet? It sure as heck ain’t Capital One! Like Jim, I’ve had excellent experience with Chase Bank.
You mentioned how difficult it can be for companies to handle things that are out of the ordinary and gave as an example the ATM machine that issued a $100 bill instead of the requested $20 bill. I had the same thing happen to me, but when I went inside the PNC bank branch to exchange the “ill-gotten” $100 bill for a $20 bill, the $100 bill was gladly accepted and I even received a nice thank you note in the mail a week or so later. Certainly, it was a much happier experience than the one you describe.
What an incredibly successful marketing program by cc card companies. General cc loss media coverage is way out of proportion to the potential loss for consumers. They have instilled a paranoia among the general populace in regards to cc theft. But the reality is that we are only reponislbe for $50 and in most, if not all, cases cc companies will waive the $50. This is the one financial product that we should be least concerned about. I’ve never had an issue getting a false charge reversed, a new card issued immediately, never paid the $50. My guess is that before the $50 rule was issued, folks may have been responsible for false charges, creating a true concern over false charges, when consumers had skin in the game.
There is one important piece of information missing from your article: Have you previously made purchases at Walmart.com with your Chase and Capital One credit card? If yes, I think it is likely that someone figured out your login ID and password (you need to change your password and make sure you don’t use the same one at any other websites). If you have not previously made purchases at Walmart.com with the Chase and Cap One credit cards, then someone got access to your wallet and wrote down the account information including the 3-digit security code on the back of your cards. This security code is not stored anywhere by any merchant (not even by your bank). Someone must have had access to your physical cards to get it. It’s just my opinion, but I don’t think you were hacked. I think you were punked. 2 jackets and a dresser? Sounds like a stupid teenage prank to me.
Another thought – it can possibly happen at restaurants where you lose sight of your card for however long it takes the server to ring you up and return with your receipt to sign. Or the infamous gas pump with the card scanner fraud. My own experience happened thanks to a motel where my card info was used to buy a set of tires, a refrigerator, and a lawnmower, but I was called by Discover inquiring about the “unusual purchases” when I was 200 miles from home, so they saved us both.
Card data does get copied and stolen at places where you hand over your card (e.g., restaurant), but why would someone at a restaurant have access to two of Jim’s credit cards? That ranges from unlikely to impossible. Also the gas pump skimmer will not get the security code printed on the back of your card. Both scenarios can lead to fraud, but neither one can explain what happened to Jim
Good point about two cards. One is bad enough, eh?
This fraud seems very odd to me. Someone somehow got hold of the information for two of your credit cards, ordered items that aren’t easily fenced, and had them shipped to your home in the hopes that they can grab them before you do? That’s a very risky plan to get items with a retail value of about $100.
Unlike UPS and Amazon, FedEx doesn’t allow you to track the progress of their delivery vehicles.
I’ve used CapitalOne for most of my banking for several years, even though I’ve never seen one of their branches. My one complaint was that when I did notice a pending fraudulent charge I had to wait until it was posted before I could contest it. For most online orders, I use their virtual cards, which are only valid at a particular merchant and so are less valuable if the number is stolen.
Problems with getting incorrect charges fixed are nothing new. In the 1970s, when I lived in Virginia, it took me several months to get an erroneous charge of $22.88 from the Redwood Motel in Mankato MN reversed. I had never heard of Mankato before then.
I had a similar issue with cap one. I too had to put my lawyer (ret.) voice on to get the agent to take me seriously. The scam went though PayPal (which I didn’t have an account) that made it harder to cancel.
The cap one agent kept telling me I had to go though PayPal, but that wouldn’t solve the problem of the scammer having my cc number!!! After many phone calls (try getting a live person at pp!) and more computer time, I finally got the cc cancelled and pp eventually refunded my new card.
Just got an email from the NC Attorney General about a brushing scam – this sounds like a more extreme version of the same thing.
https://ncdoj.gov/consumer-alert-be-aware-of-brushing-scams/
Wow, I am stuck by the brazenness of this fraud scheme and surprising ineptness of Cap One. I can only imagine the frustration.
I got an alert on my Schwab debit card recently (I have never used this ever) and I was surprised that someone in the fraud market had access to it. Fortunately some part of the fraudsters usage tripped some alarms at CS and they didn’t allow the transaction to go through. My call with CS lasted less 5 minutes and they promptly replaced the card.
I would offer the following (file this under FWIW) – although none of these would have helped in Jim’s case
So marketing vs loss prevention sounds a lot like elected city council vs police in the latest officer involved shooting. We can work this out vs no. Sad truth in our world.
Jim, I’m not quite following the full train here. Since your cards were hacked and compromised, wasn’t your initial call to your respective banks to cancel the cards? And if that’s the case, why all the run-around with a local Walmart? Hacked accounts and cancellation alone should have been all the evidence you needed to resolve who was or was not responsible for the initial charges. Shame on the Capital One rep for ignoring this crucial aspect!
As for the handling of the local items, you certainly went well above and beyond. Sounds like you put forth a noble effort to get them back to the store, and good for you. But wow, what a hassle, especially over $50.
You should have quoted the often snarked*
Please Do Not Confuse Your Google Search With My Law Degree- as a litigation Esq, Jim.lol.
This CC Scamming is a 30 Billion operation internationally.
If at home recognizing an unexpected delivery always be absolutely indignant, & absolutely deny acceptance. Pictures help.They use them, you use their rear plates exiting on them also. Individuals disputes are quite difficult & time consuming.
An x worked for UPS.She wanted the box truck empty days end. I know this gets into micro-management, and my observations.I’m in no way disparaging any delivery drivers orcs- unions. Your union or not, just like the nations major cities public services. Teachers, Police, RMV, EMT, and Fire services.The entire USA is now becoming micro-managed.
Banking, and insurance are not unionized but are USA’s top 5% of lobbies. They co-write the laws legislators pass or not. Their third party intermediaries care not for differentiating dataed consumer disputes, retention is key in both industries consorting shelf-lives though.-imo
An equally interesting question is how both cards and your address were compromised in the first place, especially as they were with different banks.
It is certainly an ingenious scam. I believe that if you receive goods you did not order, addressed to you, that they become your property so you should have been entitled to treat these purchases as yours regardless of whether or not you actually ordered them.
We are pretty sure the breach was at Walmart.com. We read that others had the same problem. It’s not just Walmart. The unfortunate situation nowadays is that wherever one stores one’s card info, we have to hope they do not get breached. We started deleting stored CC info on sites. Better to have to re-enter it each time than have others get their cyber fingers on it.
Yes, don’t opt for “convenience” at sign-in to websites because it provides hackers with one less obstacle to gain access to sensitive information. Along those lines, it’s the medical business that bothers me most – go to a new doc or start a new year, and they want your photo id, typically your DL; your SS number of course; date of birth; etc., but all information that can make it easy for hackers. And you provide it over and over, particularly seniors following Medicare guidelines. And then you have to wonder if your voluminous forms make it to a shredder, or if their “system” is vulnerable to hacking – after all, the Pentagon system and many banks and financial services have been hacked. If you haven’t been compromised, you will be eventually. Like the Wassermans.
Jim, next time use a virtual card for online purchases. That way if your cc number is comprised it can only be used at that one vendor. Just a thought.
https://humbledollar.com/2022/03/cashing-in-2/
Agreed. I confess that one of my cards is on file with Amazon, but otherwise I enter the number (which I now know by heart), even at sites I use often. There is a way to get a one-time number from most card issuers, but I have not pursued that method.
I agree it’s not a good idea to not store one’s CC info on a lot of sites. I keep my CC info in my (very secure) password manager so I “keep it close” but still retain the convenience of entering it on an order page with 1 click.
Glad you shared this story. I wouldn’t have been aware of this scam if it weren’t for you. I’d rather learn about these situations on HD than from a forwarded email.
I’ve learned that credit unions are much more responsive, since they are owned by the members. Banks are for profit, so much more hesitant to actually serve their customers.
Interesting. I recently dealt with several fraudulent claims against my CapitalOne card. In my experience the service reps were responsive and understanding. The fraudulent claims were refused by CapitalOne and never even made it onto my daily transaction list. I received a new card just a few days later.
That was my experience also with Cap One – they were fantastic to work with. Not a fraudulent purchase but one we paid for up front and later didn’t believe we’d ever get the goods delivered.
I’m sure it varies by manager and on another day, we might have been absolved. I think what threw the system haywire in our case was confusing disputing a charge, which is technically ordering goods (to your address) and then being unhappy with them, and a fraud complaint regarding something you did not order (usually to another address). We had a fraud complaint that looked like a dispute because of the address.
I have found Cap One less responsive than Citibank. Also, they recently discontinued the current account I had with them and switched me to one that charges foreign conversion fees. I am thinking of departing to Schwab.