Government Credit Card Bloopers and You
A recent audit conducted by the congressional Government Accountability Office of the credit card use (or misuse) of various government departments, including the Department of Defense, Department of Homeland Security, and the Department of Veteran’s Affairs has yielded “surprising” revelations regarding the spending habits of these departments.
Reviews of credit card statements have turned up expenditures which one would not normally associate with the day to day operations of a first world country’s government programs, including internet dating sites, lingerie, tailor-made suits, expensive dinners, and certain other ’services’ that aren’t fit for printing.
The GAO’s report uncovered some 6 billion dollars worth of credit card purchases which evidently did not follow the regular authorization procedure for government credit card transactions. The report goes on at some length to describe individual purchases made by various government employees across different departments, each of which serves as evidence of the abuse of government purchase cards.
The entire ordeal is not only a fascinating look at the questionable internal controls existing at all levels of our government, but a poignant reminder to individual consumers of one of the most useful features of credit cards: the itemization of each and every individual purchase made with that card over the course of a given billing period. This information is valuable for a couple of purposes, both demonstrated by this government case study: fraud prevention and expense analysis. Let’s take a look at how you, the private individual, can make the most use of this information in both areas.
Credit Card Fraud
It is no secret that credit card fraud is on the rise. I used to work on a regular basis with victims of identity theft that stemmed from someone stealing their credit card information to make purchases without the cardholder’s knowledge. A little vigilance can go a long way with one’s credit card statements. Each month, when you get your statement, peruse the listing of expenses, verifying that you can remember each one, or at the very least, verify that each expense seems like something you would have charged to your card. If one or more charges seems suspicious, highlight it or mark it with a pen and contact your card issuer immediately to discuss the purchase and, if necessary, file a chargeback, close the account, or take any other action necessary to prevent further fraudulent charges to your account.
Expense Analysis
Expense analysis is a useful tool, particularly for those that charge nearly every expense to one of their credit cards. For these consumers, your credit card statement can serve as a valuable source of information in managing your expenses, as it allows you to quickly add up the expenses falling in various categories (such as groceries, gas, or entertainment) to see how much you’re spending in each. By monitoring these expenses and setting goals for the next billing period, you incorporate a powerful method for meeting long-term financial goals, such as saving for a car, home, or education.
So let’s take a step back and learn from the government’s mistakes by regularly “auditing” our own credit card statements to prevent fraud and to minimize unnecessary expenses in our lives. The wise utilization of this data can shape your future, if you want it to.
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The rules that federal employees are given regarding federal purchase cards are at best confusing and at worst self-contradictory. Federal employees are told to put ALL travel expenses on their cards when they travel, even if they choose to go out to eat somewhere nice, but just putting that purchase on a card isn’t a guarantee for reimbursement. There are many, many rules like this that are simply confusing for the on-the-ground federal employee, and then the GAO is basically ridiculing them here, trying to pass the buck from their own poorly-written rules.
“A little vigilance can go a long way with one’s credit card statements.” YES!
Just like I wrote a few days ago, looking at the statements (or your bank account) regularly can do so much in the way of protecting you. I mentioned that I check my bank account every day, and I do ;) It’s not time consuming, and I always notice immediately if anything’s unusual (which it is sometimes, but due to me forgetting I bought something – never fraud).
:D