Whistleblower: Credit company says it can't stop scammer

  • Updated: July 16, 2011 - 9:41 PM

Visa reimbursed a Minnetonka customer when scammer charged $4.93 to her credit card twice, but company refused to block firm from striking again.

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Some people might not notice a bogus charge of $4.93 on their monthly credit card bill. Scammers likely bank on it.

But Jean Jacobs spotted the charge and quickly discovered she was one of many victims across the country being nicked for paltry amounts in unauthorized credit card charges and bank debits.

"I would never charge $4.93 for anything," said Jacobs, 62, of Minnetonka. "Well, maybe parking."

The merchant listed next to the charge -- Brenda and Associates -- wasn't a name Jacobs recognized. And the merchant's phone number, which was listed on her statement, was disconnected. "I was totally baffled."

In Florida, where Brenda and Associates appears to be based, the attorney general's office has received 32 complaints about the company. The attorney general's office gets "tons of complaints" about similar cases, said spokeswoman Jennifer Davis. "It's such a huge issue, and there are so many different ways that it can happen," Davis said.

Last year, the FTC disrupted an international scheme that targeted a million card holders who were hit with one-time unauthorized charges of $10 or less, said Steven Wernikoff, an attorney in the FTC's Chicago office.

Wernikoff said the scam "flew under the radar" for three years. Many consumers didn't notice the small charges or didn't want to bother filing a complaint, which means the scheme also remained invisible to fraud detection programs run by the major credit card companies, he said.

To deter scammers, authorities urge consumers to carefully review their statements, contesting unauthorized charges and filing complaints with their state attorney general offices or the Federal Trade Commission.

Can't prevent more charges

Unlike many consumers, Jacobs immediately called the issuer of her credit card and contested the unauthorized charge of $4.93. Her account was subsequently credited that amount.

Jacobs found dozens of other victims of Brenda and Associates after she did some online research. Like her, they had been hit with unauthorized charges ranging from $1.93 to $4.93.

"This Brenda and Associates should be investigated and put in jail for fraud," complained one consumer in Aventura, Fla. "They only charged a $1.93 to my [credit] card. How many $1.93's have been charged to other accounts? Catch the crooks and put them in jail."

The Star Tribune was unable to reach the company, which does not appear to have a working phone number or website.

Jacobs can't figure out how the firm got her credit card number.

"I'm very careful," she said. She never lost her wallet and nobody else uses the card. When she orders online, she makes sure she's on a secure website. When Jacobs receives her credit card statement, she checks the bill against the receipts she's saved. "A lot of people don't bother to compare," she said.

Three months after Jacobs first spotted the scam, Brenda and Associates hit her with another $4.93 charge. Once again, she complained and the charge was cleared.

"It's annoying and I would love for these people to be shut down," Jacobs said.

Contesting even a small charge can be a hassle, she said.

"I had to get through 16 levels of voice mails, and then when I got connected to a person, I got disconnected. Twice. ... It's hardly worth the effort," Jacobs said. "There are a lot of people who would say, 'My time isn't worth $4.93. I'll just pay it.' I could do that, but it's the principle. It just makes me mad that they can do this."

In an effort to stop the unauthorized charges, Jacobs asked a Visa customer service employee to block Brenda and Associates from charging her account since she would never do business with the firm.

But Visa said it couldn't block the charges. Instead, Jacobs was told to call Brenda and Associates and complain about the unauthorized activity. That leaves her without a way to deal with the problem, since Jacobs can find no way to reach the firm.

"I'm aggravated," Jacobs said. "I want them to stop but I don't know how to stop them."

Visa officials wouldn't comment about Brenda and Associates, but merchants that attract numerous complaints about deceptive practices are reviewed and can eventually be eliminated from the Visa system.

Ben Wogsland, a spokesman for the Minnesota attorney general's office, suggested that Jacobs file a complaint with his office. Attorneys there could send a letter to the company in an effort to stop the unauthorized charges. If enough people like Jacobs complain, investigators eventually might be able to build a case against the company to file a lawsuit, he said.

Jacobs could also request a new credit card. But her current card number is on file with various merchants, making online shopping easier and quicker. Changing the card, she said, would be a "huge inconvenience."

But Jacobs said the hassle may be worth it if "I start to get other weird charges."

Mary Lynn Smith • 612-673-4788

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