If you’ve ever noticed a small, unexplained charge on your bank statement (maybe just a few cents), it may not be a harmless problem. Those “ghost payments” could be a warning sign that a scammer is testing your account. Once they confirm the account is active, larger fraudulent charges often follow.
As the busy holiday shopping season approaches, it’s more important than ever to stay on top of your account activity and keep an eye out for suspicious transactions. Let’s take a closer look at how ghost payments work and what to do if you see one.
When was the last time you reviewed your bank statements and reviewed each individual transaction? If you’re like a lot of people, it’s probably been a while. We often don’t pay much attention to account activity unless there is a major red flag, such as a large unauthorized payment. And that’s what many scammers count on.
A ghost payment is a small, easily overlooked charge that you never authorized. Scammers use them to check if your account is active and see if you are paying attention before stealing a larger amount.
“These small authorizations, a way to confirm that your card is active, are the first clear sign that scammers are targeting you, and any future charges are likely to be more expensive,” Danai Antoniou, a former fraud systems engineer and current co-founder and chief scientist at Gradient Labs, said in a statement.
Read more: 7 common banking scams (and how to avoid becoming a victim)
Ghost payments are usually for odd amounts (think: $0.37, $1.12, or $2.19) that don’t correspond to any purchases you remember making. Scammers use small numbers to avoid raising fraud alerts or suspicions on their part.
That means you need to be diligent about reviewing your transaction history for them.
Start by reviewing your online banking statements for any outstanding charges you don’t recognize. In addition to small, odd amounts, be on the lookout for generic or unknown merchants, such as “Test” or “Payment Processing,” or a company located in another state or country.
You can also set up banking alerts to receive a notification whenever a new transaction is posted to your account.
If you notice suspicious charges, the first step is to contact your bank and inform them. They will probably freeze your card and send you a new one with different payment details. You must also report it to the Federal Trade Commission.
Next, update your payment information for any recurring transactions or autopay invoices; Otherwise, you could miss a payment and receive late fees.
It’s also a good idea to set up multi-factor authentication for your accounts and set a calendar reminder to regularly change your banking passwords.
And finally, review your credit reports to make sure you haven’t been subject to identity theft, which could lead to fraudulent accounts being opened in your name.
Phantom payments, no matter how small, should not be ignored. These payment scams are just the first step in what could be a series of fraudulent withdrawals that can accumulate.
If you suspect your account has been compromised, be sure to act quickly to keep your money and personal information safe.
Read more: Is it safe to link your bank accounts to financial tools and apps?