This past week it was reported that more than 40 million credit card numbers were stolen by computer hackers from some of the nation’s largest retailers including BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, TJ Maxx, Marshalls, Forever 21 and DSW.
How can you protect yourself from this kind of theft?
Under Federal Law you are not responsible for unauthorized charges made to your credit or debit card above $50, but if you read the fine print there are some exceptions. You are obligated to report your card as lost or stolen, here are the word for word details from the Federal Commission website.
Credit Card Loss or Fraudulent Charges (FCBA). Your maximum liability under federal law for unauthorized use of your credit card is $50. If you report the loss before your credit cards are used, the FCBA says the card issuer cannot hold you responsible for any unauthorized charges. If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card. Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.
After the loss, review your billing statements carefully. If they show any unauthorized charges, it's best to send a letter to the card issuer describing each questionable charge. Again, tell the card issuer the date your card was lost or stolen, or when you first noticed unauthorized charges, and when you first reported the problem 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 or Debit Card Loss or Fraudulent Transfers (EFTA). Your liability under federal law for unauthorized use of your ATM or debit card depends on how quickly you report the loss. If you report an ATM or debit card missing before it's used without your permission, the EFTA says the card issuer cannot hold you responsible for any unauthorized transfers. If unauthorized use occurs before you report it, your liability under federal law depends on 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 transfer. You also risk unlimited loss if you fail to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use 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. However, for unauthorized transfers involving only your debit card number (not the loss of the card), you are liable only for transfers that occur after 60 days following the mailing of your bank statement containing the unauthorized use and before you report the loss.
If unauthorized transfers 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 or debit card, you cannot be held liable for additional unauthorized transfers that occur after that time.
You would probably need a law degree to completely understand all of the above rules, exceptions, and restrictions. Here are seven ways to protect yourself from credit card theft.
1. Maintain No More Than 3 Credit Cards
The more credit cards you have, the less likely it is that you will be able to keep track of them. There are an abundance of other good reasons to limit yourself to no more than three credit cards, but protecting yourself from credit card theft is a good one by itself.
2. Check Your Balance Between Statements
Of course, you need to carefully review your statements each month to make sure that card is not being used for unauthorized charges. You might also take a couple of minutes to check your balances once each week. Most credit cards provide online access and a toll free number that allows for you to check your balance and recent transactions. A good tradition would be to check your balances and transactions at the end of each week. Don’t just look for large charges, smart thieves may hit your card for a small amount repeatedly in an effort to go on undetected. If you find any unauthorized charges, report them immediately and cancel your card and order a new one. While it may be a slight inconvenience to be without your card for a week to ten days, it is good insurance against the possibility of future unauthorized charges.
3. Never Give Out Your PIN or Store It With Your Credit Cards
As much as people are warned, there are apparently quite a few people still carrying around their PIN in in their wallet. As I researched this story, I discovered that although there are significant protections under Federal Law for those that lose their credit and debit cards, if the thief has used your PIN to access your account it may be very difficult to get your money back.
4. Contact Your Credit or Debit Card Issuer and Ask For Their Written Policy On Lost Or Stolen Cards.
Included in the notorious “terms and conditions” section of that agreement you signed, is a disclaimer including your credit or debit card company’s policy on lost or stolen cards. It might be a good idea to go back and review that section of the agreement again.
5. Set Up A File In A Secure Location With Your Card Number and Phone Numbers
If you lose your cards, you need to be able to quickly locate the phone number and account numbers so you can report them as stolen. You can get this information from your last monthly statement or an online account. As a backup you may want to keep a file stored securely with your important documents that contains this information so you can quickly make a theft report if the unexpected happens.
6. Shred All Banking and Financial Documents You Dispose Of
If you don’t keep your old statements and throw them away, by all means shred them first. You can purchase a shredder at an office supply store for less than $30 and this simple step will prevent thieves from getting this information from your trash.
7. Do Not Use Your Credit or Debit Cards Over Public WiFi Networks
A favorite technique of credit card thieves is to hack into your computer through public WiFi, yes the kind you use when you are at your favorite coffee shop or bookstore. Don’t ever do your online banking or use your credit cards over an unsecured network like this.
It seems that there are two sides to this issue that both represent an exaggeration. If your credit card is stolen you do have significant protection under Federal Law and are unlikely to be stuck owing any large amount of money. While this is true in most cases, you will still have the headache of dealing with the problem for several weeks or months. If the theft involved a debit card, you may even have to wait several weeks to get the money back that was taken from your bank account. So, if you are a victim of credit card theft it is not going to be a pleasant experience. On the other hand, it is no reason to jump out a window or have the expectation that you are going to be out thousands of dollars. I think the truth is quite likely in the middle on this one.
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Helping you make the most of God’s money!