Many people find it easy and convenient to use a credit card
and ATM card. The Fair Credit Billing Act (FCBA) and the Electronic
Fund Transfer Act (EFTA) offer procedures for you and businesses
to use if you are the victim of a credit card theft.
Limiting Your Financial Loss
Report the ATM or credit card theft to the credit card issuers
as quickly as possible. Many companies have toll-free numbers
and 24-hour service to deal with such emergencies. It's a good
idea to follow up your phone calls with a letter. Include your
account number, when you noticed your credit card was missing,
and the date you first reported the credit card theft.
You also may want to check your homeowner's insurance policy
to see if it covers your liability for credit card thefts. If
not, some insurance companies will allow you to change your policy
to include this protection.
Credit Card Theft. If you report the credit card theft before
the credit cards are used, the FCBA says the credit card issuer
cannot hold you responsible for any unauthorized charges. If
a thief uses your credit cards before you report them missing,
the most you will owe for unauthorized charges is $50 per credit
card. This is true even if a thief uses your credit card at
an ATM machine to access your credit card account.
However, it's not enough simply to report your credit card loss.
After the loss, review your billing statements carefully. If
they show any unauthorized charges, send a letter to the credit
card issuer describing each questionable charge. Again, tell
the credit card issuer the date your credit card was lost or
stolen and when you first reported it to them. Be sure to send
the letter to the address provided for billing errors. Do not
send it with a payment or to the address where you send your
payments unless you are directed to do so.
ATM Card Loss. If you report an ATM card missing before it's
used without your permission, the EFTA says the card issuer
cannot hold you responsible for any unauthorized withdrawals.
If unauthorized use occurs before you report it, the amount
you can be held liable for depends upon how quickly you report
the loss. For example, if you report the loss within two business
days after you realize your card is missing, you will not be
responsible for more than $50 for unauthorized use.
However, if you don't report the loss within two business days
after you discover the loss, you could lose up to $500 because
of an unauthorized withdrawal. You risk unlimited loss if you
fail to report an unauthorized transfer or withdrawal within
60 days after your bank statement is mailed to you. That means
you could lose all the money in your bank account and the unused
portion of your line of credit established for overdrafts.
If unauthorized transactions show up on your bank statement,
report them to the card issuer as quickly as possible. Once
you've reported the loss of your ATM card, you cannot be held
liable for additional amounts, even if more unauthorized transactions
are made.
Protecting Your Credit Cards
The best protections against credit card theft and fraud are
to know where your credit cards are at all times and to keep them
secure. For ATM card protection, it's important to keep your Personal
Identification Number (PIN) a secret. Don't use your address,
birthdate, phone or social security number. Memorize the number.
Statistics show that in one-third of ATM card frauds, cardholders
wrote their PINS on their ATM cards or on slips of paper kept
with their cards.
The following suggestions may help you protect your credit and
ATM card accounts.
For Credit Cards:
Be cautious about disclosing your account number over the phone
unless you know you are dealing with a reputable company.
Never put your account number on the outside of an envelope
or on a postcard.
Draw a line through blank spaces on charge slips above the total
so the amount cannot be changed.
Don't sign a blank charge slip.
Tear up carbons and save your receipts to check against your
monthly billing statements.
Open billing statements promptly and compare them with your
receipts. Report mistakes or discrepancies as soon as possible
to the special address listed on your statement for "billing
inquiries." Under the FCBA, the card issuer must investigate
billing errors reported to them within 60 days of the date your
statement was mailed to you.
Keep a record — in a safe place separate from your cards
— of your account numbers, expiration dates, and the telephone
numbers of each card issuer so you can report a loss quickly.
Carry only those cards that you anticipate you'll need.
For ATM cards:
Don't carry your PIN in your wallet or purse or write it on
your ATM card.
Never write your PIN on the outside of a deposit slip, an envelope,
or on a postcard.
Take your ATM receipt after completing a transaction.
Reconcile all ATM receipts with bank statements as soon as possible.
