Recently, a story surfaced about a 12-year-old Australian boy stealing his mother’s credit card and going on vacation to Bali, Indonesia, after the two got into an argument.
This got us wondering. What happens when a child sneaks your credit card to buy something or even book an expensive vacation?
It’s not like it used to be, when a kid might sneak into your wallet and take $20 in cash. Now, kids could rack up hundreds or even thousands of dollars in purchases with the click of a button.
Turns out, it’s kind of ambiguous if your bank or credit card company will allow you to get that money back.
“There’s not clear-cut guidelines for what some banks will or won’t do,” said Robert Harrow, Head of Credit Card Research with ValuePenguin.com.
Currently, there’s no law stating if an unauthorized purchase by your child or even your spouse is considered fraud. Which means, a bank or credit card lender can decide if that purchase falls under fraud protection.
“Certain banks like Citibank and Capital One have been a little bit more strict on with what’s defined as fraud," said Harrow.
For the most part, Harrow said, banks and credit card lenders can challenge an unauthorized purchase with one simple document; a police report. Harrow said, most parents won’t file a police report against their child, so, it’s makes it harder to prove fraud.
“Generally, banks will tell you, if you ask of them, what constitutes fraud? The line they’ll give you is, well, it’s only fraud if you’d be willing to file a police report or file charges against who did this to you.”
Harrow said it’s understandable why banks and lenders don’t want to become too lax with fraud rules. It could open what Harrow calls friendly fraud
“With people purchasing things, then claiming they were unauthorized just to get their money back, then enjoy what they paid for.”
The best course of action when you see an unauthorized purchase from your child is to contact the bank and let them know. It can be a simple process and the purchase could be removed immediately. If it’s a larger purchase, the back or lender might refuse, and you, the consumer, might have to get legal representation to get that money back.
Harrow said pay attention to your credit cards and apps that have your credit card number saved and watch out for small purchases that can add up, such as buying a song on iTunes or coins in a mobile game.
Apple for instance, refunded over $32 million dollars in 2014 to parents whose children made little purchases, that just kept adding up.