Monitor Your Credit Card Statement
After you report fraud to your card issuer, regularly sign into your online account and check that you received the refund for the fraudulent charges and there are no new signs of fraud.
Under the Fair Credit Billing Act your maximum liability for unauthorized charges is $50. For instance, if someone makes $100 in fraudulent charges with your card, you can only be required to pay $50. However, most major banks, such as Citi and Chase, offer $0 liability on unauthorized charges.
Once your billing cycle closes and you receive your , double check that the information listed is up to date. Verify the details of each transaction, such as the merchant, size of purchase and date, as well as you overall balance and any payments you’ve made toward your balance or credits you’ve received .
Who Is Liable For Credit Card Fraud
If you notice charges on your credit card that aren’t yours, call your bank immediately to report it and have the card cancelled. Your credit card number could have been picked up by an employee at a company where you purchased goods. Often, the fraudulent purchases are made online, but this is not always the case as your card could have been cloned.
The good news is that consumers are not typically responsible for the amounts lost in cases of credit card fraud. The Fair Credit Billing Act limits the liability to $50, and oftentimes, there’s no cost at all.
The Fair Credit Billing Act Limits Your Liability
Under the Fair Credit Billing Act , cardholders are protected from having to pay the full cost of fraudulent credit card charges.
This federal law limits your liability to $50, as long as you report fraudulent credit card activity within 60 days after receiving a statement with unauthorized charges. In other words, $50 is the maximum amount you could owe the bank if someone steals your card and uses it without your permission before youve reported the card stolen.
If you report the card stolen before any charges are made, the FCBA says youre not responsible for any of the charges. You also have no liability if someone stole your credit card number, but not the actual card.
Most credit card companies offer $0 liability across the board, in the interest of customer service. If your card issuer offers this benefit, you wont owe any money for unauthorized charges, even if the charges were made before you reported the card stolen. But you must contact the card issuer to report your card as lost or stolen as soon as you notice the problem.
Remember, debit cards do not offer the same legal fraud protections as credit cards. With debit cards, if you fail to report a lost card within two days, you could be liable for up to $500 in fraudulent charges. Wait more than 60 days to report unauthorized debit card transactions and you could be responsible for all the charges. This is just one more reason why its typically best to pay for purchases with a credit card.
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Report The Crime To The Police
Under California law, you can report identity theft to your local police department.1 Ask the police to issue a police report of identity theft. Give the police as much information on the theft as possible. One way to do this is to provide copies of your credit reports showing the items related to identity theft. Black out other items not related to identity theft. Give the police any new evidence you collect to add to your report. Be sure to get a copy of your police report. You will need to give copies to creditors and the credit bureaus. For more information, see Organizing Your Identity Theft Case” by the Identity Theft Resource Center, available at
What Are Signs Of Identity Theft
The first step in figuring out if youre a victim of identity theft is to look for evidence that it occurred. Review your credit report for signs of suspicious activity and unfamiliar changes, like accounts opened that you dont recognize or credit checks from companies youve never done business with. Monitor your credit card or other account statements for purchases you didnt make.
Learn more about recognizing identity theft:
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What You Can Do To Protect Yourself
To protect yourself against debit card fraud, you should do the following:
- Only use an ATM inside a bank
- Cover your hand when you type your pin into an ATM
- Set up text alerts for each transaction over $0.01 on your card. This way youll be immediately alerted if a bogus charge is made
- Monitor your bank on a regular basis
- Report stolen funds immediately
- Check-in annually with your bank as to the policies regarding debit card theft
While you can notify the bank by phone, it is best to get everything in writing. For purposes of the time requirement, notice is considered given when you put the letter in the mail. Its even better if you send the mail certified. You can, of course, send notice by mail and call. Whatever you do, keep a record of your communications you have with the bank. This will put you in the best position if you have to escalate your problem.
Remember that if you take the actions listed above, you will be more protected than you otherwise would. Even if you didnt do anything wrong, like in the example above, you can still find yourself stuck with fraud charges that your bank wont reverse. These specific steps will help you protect yourself, even when youre not at fault. This is particularly important if you use your debit card frequently.
Dont want to use a credit card? Learn how to survive with just debit cards here.
How To Spot Signs Of Credit Card Fraud
Whether you suspect youâre a victim of credit card fraud or youâd like to prevent it, here are some common signs to look out for:
- Transactions on your monthly account statements that you donât recognize.
- Blocked access to your account.
- Changes to your credit report you didnât authorize, like new accounts or addresses that arenât yours.
- Unexpected calls from creditors or collection agencies.
A monitoring tool can help you stay on top of your personal information. is a free service that gives you the ability to detect suspicious activity.
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The More You Give The More Youll Get
While swift reporting is advised, so is presenting relevant documentation. Be prepared with credit card statements and credit reports showing the fraud, says Shipley. If you know the perpetrator, speak up. If you can provide that persons contact information, all the better.
Do not, under any circumstances, conduct your own whodunit hunt, experts stress. It might put you, your friends and family members in danger.
You dont know who youre dealing with, says DiDomenica. People who break the law in this way could be capable of even worse crimes. Yes, keep emails and forward them to make it easy for the investigators, but dont go beyond that. No vigilantism.
What Does It Mean To Be Victim Of Credit Card Fraud
What is Credit Card Fraud? Credit card fraud is when someone uses your credit card or credit account to make a purchase you didnt authorize. This activity can happen in different ways: If you lose your credit card or have it stolen, it can be used to make purchases or other transactions, either in person or online.
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Be Wary Of Credit Card Protection Offers
This type of insurance is unnecessary because of the federal limits in place. Often times, your bank or credit card company will have identity protection or fraud protection services already in place just by being a customer. Third-party companies that offer credit and identity theft insurance can be expensive and often simply follow the same steps that you would in reporting unauthorized spending on your card.
But beware: some scam artists try to sell $200-300 credit card insurance by falsely claiming that cardholders face significant financial risk if their cards are misused.
Select Breaks Down The Steps You Can Take If Your Credit Card Information Is Stolen And How You Can Limit Your Exposure To Fraud
Selects editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.
happens every day, but it’s especially prevalent during times of economic hardship. You should consistently take steps to protect your credit so you minimize the chance that you’ll become a victim of fraud.
Below, Select breaks down the steps you can take if your credit card information is stolen and how you can limit your exposure to fraud.
How To Dispute Unauthorized Or Fraudulent Charges
The credit card company can decide you owe the disputed amount when theres a disagreement between you and a merchant over a charge you agreed to. But in a case where you didnt authorize the charge, there is more protection available for you. If your credit card was stolen and then used to make purchases, the company cant make you pay more than $50 of the unauthorized amount, as the Federal Trade Commission explains. And if only the card number was stolen, so that you are still holding on to the physical card, youre not obligated to pay any unauthorized charges.
Finally, the law limits what you owe if your credit card company doesnt follow the procedures mandated by the Fair Credit Billing Act. Thus, if your credit card issuer tries to collect a charge while its investigating or violates the act in any other way, you should contact the Federal Trade Commission.
Need a helpful visual guide to how credit card dispute works? Weve created a that walks you through the process and highlights both your rights and your responsibilities when disputing a charge with a creditor.
The CESI Team is committed to helping you reach your financial goals. If debt keeps you from living the life you dream of, contact us for a free debt analysis today and get started on the road to a brighter future!
A Fraud Alert Wont Freeze Your Credit
Before you place a fraud alert or a on your credit reports, make sure you know the difference between those two types of credit protection offered by all three major credit reporting agencies.
When you place a fraud alert on your credit reports, creditors must first verify your identity before processing a credit application under your name. Thats much different than a credit freeze, which completely blocks creditors from accessing your credit report.
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Freeze Your Credit Reports
Protecting your current credit accounts from fraud is an important stepbut what if identity thieves try to take out new lines of credit under your name? The best way to protect yourself from this kind of credit card fraud is by freezing your credit reports.
When your Equifax, Experian and TransUnion credit reports are frozen, anyone who tries to open a credit card or apply for a loan under your name will be declined. This prevents identity thieves from taking out credit cards or loans under your name, but it also prevents you from opening new lines of creditso if you want to apply for a new credit card, take out a personal loan or shop for a mortgage, youll need to thaw your credit freeze first.
Resolving Claims Outside The Dispute Process
Of course, even if the bank conducts a thorough credit card fraud investigation, they may still reach the wrong conclusion. Our data suggest that 60-80% of all chargebacks may be cases of friendly fraud, not criminal fraud. For instance, this may happen if a cardholder signs up for a free trial, but fails to cancel before regular billing kicks in. An unsupervised child completing an in-app purchase on a parents mobile device would be another example.
These are forms of chargeback abuse. Regardless whether it’s intentional or not, these chargeback scams carry consequences for everyone:
lose revenue and merchandise and pay added fees and penalties. They see higher operating costs and may lose the ability to process card payments in the long term.
ace higher operating costs as theyre forced to devote more resources to investigating disputes. This can slow down other profit-generating departments within the organization.
can have their money tied up for weeks or months due to the chargeback process. This inability to access funds during this time could cause hardships.
Its best for everyone if the cardholder directly contacts the merchant before filing a chargeback. The two parties may be able to collaboratively resolve the situation and avoid a dispute. This would be a win-win scenario for everyone: the cardholder could see faster resolution, while banks and merchants are spared the cost of the dispute process.
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How Do Banks Conduct Credit Card Fraud Investigations Who Sets The Rules For Fraud Claims
A credit card fraud investigation should be a collaborative process of considering facts and making a reasonable judgment on whether the cardholder or the merchant is to blame. Too often, however, it can start to feel like merchants and cardholders are in conflict with one another, with both sides providing facts to support their case.
But that raises the question, who gets to decide which facts are most important? What standards are in place to govern credit card fraud investigations? And, most importantly, how do banks conduct this process to ensure that decisions are fair and accurate?
Detect Unauthorized Credit Card Charges Early
Unauthorized credit card charges include any type of charge to your account for which you didnt give permission. Often, unauthorized charges result from either from a stolen credit card or a compromised card number. Sometimes, unauthorized charges result from clerical error or a computer glitch. Either way, its your responsibility to find and report these charges as quickly as possible to minimize your liability for charges you didn’t make.
Before reporting charges to your credit card issuer, make sure the chargers weren’t made by a joint account holder or authorized user on your account.
Many unauthorized credit card charges go unnoticed for several months because cardholders dont thoroughly review their credit card statements. But early detection is crucial when it comes to correcting unauthorized charges. You could be liable for the charges if too much time passes from the time the charge is made to the time you report it. Specifically, the Fair Credit Billing Act says that you should report unauthorized charges and other credit card billing errors to your card issuer within 60 days of the date the statement containing the error was submitted.
For example, if an unauthorized charge was made on February 15 and your statement was submitted on March 1, you have until April 29 to dispute the charge in writing. The credit card issuer isnt legally required to handle your dispute favorably if you report after 60 days.
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What Fraud Protection Features Do Credit Cards Provide
Preventing credit card fraud can help save merchants and credit card issuers money, build trust among cardholders and keep you from having to wait for a new card. In short, it’s a win-win for everyone.
Credit card issuers use a variety of measures to stop fraud from happening. These can range from physical features built into your card to complex artificial intelligence systems that detect and decline unusual transactions .
As a cardholder, you could look for a card or issuer that offers:
There are also credit card fraud prevention measures that could be taking place without you noticing.
For example, before a transaction gets approved, it may be assigned a risk score based on the time of day, transaction amount, card’s transaction history, the location of your mobile phone and other variables. The merchant can decide whether to approve or deny transactions depending on their risk scores. And online purchases may be scrutinized based on additional information, such as the purchaser’s IP address, email host, shipping address and order details.
What To Do If Youre A Victim Of Credit Card Fraud
Contact your financial institution immediately if your credit card is lost or stolen. Contact it if you find payments on your credit card statement that you didnt make or approve.
If you think youre a victim of credit card fraud:
- write down what happened and how you first noticed the fraud
- contact your credit card issuer to tell them about the fraud
- take notes of who you talked to and when you spoke to them
- keep all documents that you think might be helpful when the police investigate the fraud
- contact your local police service to file a complaint
- contact other accounts that could be tampered with by the person
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Report Loss Or Theft Immediately
Acting fast limits your liability for charges you didnt authorize. Report the loss or theft of your card to the card issuer as quickly as possible. Many companies have toll-free numbers and 24-hour service for such emergencies. Once you report the loss of your ATM or debit card, federal law says you cannot be held liable for unauthorized transfers that occur after that time.
- Follow up with a letter or email. Include your account number, the date and time when you noticed your card was missing, and when you first reported the loss.
- Check your card statement carefully for transactions you didnt make. Report these transactions to the card issuer as quickly as possible. Be sure to send the letter to the address provided for billing errors.
- Check if your homeowner’s or renters insurance policy covers your liability for card thefts. If not, some insurance companies will allow you to change your policy to include this protection.