BillGuard seeks out fraudulent credit card charges that slip by

Thu Nov 17, 2011 11:20am EST

Credit cards are pictured in a wallet in Washington, February 21, 2010. REUTERS/Stelios Varias

Credit cards are pictured in a wallet in Washington, February 21, 2010.

Credit: Reuters/Stelios Varias

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(Reuters) - If you're like a lot of credit card users, you don't scour your bills, you just pay them. But you could be paying recurring charges you never signed up for, have fraudulent charges on your bill or otherwise pay for more than you should -- like millions of Americans do each year to the tune of $8.6 billion. And now, yes, of course, there's an app for that -- in fact, a free service launched in a beta test earlier this year called BillGuard that will look at your bills for you to try to determine if you're being ripped off or are paying recurring charges you weren't aware of.

Web-based BillGuard.com logs into your credit card accounts with user names and passwords that you provide, and scans your bills looking for potential red flags. Recurring charges you already authorized, you can simply acknowledge. Problem ones you can dispute.

Jesse Hertzberg, a web publishing software executive from Brooklyn, New York says BillGuard caught recurring charges totaling $68 a month he and his wife weren't aware of, as well as fraudulent charges.

"I would not have noticed it without BillGuard," he says. He credits the service with saving them hundreds of dollars. " I was thrilled and started telling my friends about the service."

BillGuard co-founder Yaron Samid says the company is constantly scanning web chatter to try to find complaints about fraudulent charges on credit card bills. Then the company searches its users bills for those charges and flags them. The idea for the company was born in part from a report in 2009 that millions of credit card users were being billed 25 cents at a time by a fictitious company.

"Nobody has attempted to tackle what we're tackling," Samid says. "We are providing a service that we believe the banks should be providing for their customers." And in fact, he says he expects to have partnerships with several major banks in the next year.

While the system appears to work based on Reuters testing, there are some concerns. Susan Grant, director of consumer protection for the Consumer Federation of America, wonders whether there's really a need for this kind of service.

"Shouldn't people check their own bills rather than relying on a service that makes assumptions about what's usual or unusual, which may or may not be correct?" she asks. "It's not like ID theft, where information about you may be hidden from your sight in databases that you don't have access to."

And while Samid says BillGuard uses a third party that works with financial institutions for the log-in information and takes great steps to secure that information, giving up your passwords for any reason does not sit well with security experts.

"As a security person, I cannot recommend the sharing of login or password information with anyone. Especially not the login and password for each card that you own," says Phil Blank of Javelin Strategy & Research. "This model may carry significant potential danger.

Regardless, Mayer Reich, CEO of RankAbove, a search engine optimization company, who was involved in the initial testing of Billguard, says he thinks it's a great idea that's going to be a hit with people like him who don't look that closely at their bills.

"Within the first 2 weeks they caught several charges that shouldn't have been processed," he says. "The total was over $100 and I would have never caught these charges if not detected by the software. The reason I love the product is in the past I never really checked my credit card bill often and most likely missed these kinds of charges as they were small transactions."

Now the question is whether consumers like him will risk their personal information -- with the promise that it will be safe -- to take advantage of the automation and crowd-sourcing offered by BillGuard, or just read their bills more closely?

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The author is a Reuters contributor. The opinions expressed are his own.

(Editing by Jilian Mincer and Beth Gladstone)

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Comments (1)
YaronSamid wrote:
Awesome article Mitch, thanks. We especially love seeing BillGuard users being interviewed! The love for the service is truly overwhelming.

Regarding Susan and Phils concerns about providing BillGuard with login credentials to your online credit card statement, let me try to clear things up a bit. To automatically scan your credit card for unwanted charges, BillGuard requires “read-only” access to your credit card activity. This type of limited access is made possible by a banking industry standard called Yodlee (www.yodlee.com). Yodlee enables the secure sharing of transaction data between banks and personal finance companies like BillGuard. 26 million consumers trust their login credentials to Yodlee. Since being established over a decade ago, the highly secure system has never been breached. When you register a card for protection by BillGuard, you enter your login credentials for the web site that displays your credit card activity. Those credentials are passed to Yodlee and are not stored by BillGuard. This ensures that even in the unlikely event that someone hacks into your BillGuard account, the worst they could do is see your purchase history.

That said, some people will not provide any company their login credentials to another site and thats to be expected. While personal finance services like Mint and Pageonce have 10M+ people trusting them with this information in return for managing their finances in one place, there are over 180M Americans who own at least one credit card or debut card and the way most of them will receive the benefit of BillGuard’s advanced card protection services will be via their banks someday. Thats our long term ubiquity strategy. No login credentials required at all. Until then, everyone is welcome to protect their cards at www.billguard.com and email me personally at yaron@billguard.com if you have further questions or concerns. We’re grateful for the opportunity to earn your trust and look forward to being “safer together”. So far BillGuard has saved its users of $500,000 in just our first 5 months of beta testing. We hope you join the movement.

Yaron Samid

Founder & CEO, BillGuard

www.billguard.com

Nov 17, 2011 2:29pm EST  --  Report as abuse
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