Protecting Yourself Against Losses
It's getting more and more difficult to protect your credit cards from theft. Thieves and scam artists keep coming up with more clever ruses to obtain the information they need to use your cards fraudulently or obtain credit in your name. Even your identity can be stolen.
Keep Your Credit Cards Safe
Your best protection against credit card fraud is to know where your cards are at all times. Don't leave them lying around on your desk at work or in your car or anywhere else they could be accessible to others. Keep the PIN for your debit and ATM cards a secret. Don't use personal information such as address, phone number, or birth date as the basis for your PIN; they're too easy for a thief to guess.
Don't disclose your credit card number over the phone unless you're dealing with a reputable company and you're the one who placed the call to them. If someone calls and tells you that you've won a prize but they need your credit card number to verify, hang up. Scammers constantly get more sophisticated. They might use “vishing” scams where a computer dialer poses as your bank and asks you to call in to discuss transactions in your account. Never write your account number on the outside of a piece of mail. When you get a renewal credit card or you cancel a card, cut the card up into small pieces, being sure to cut through the number. Ideally, run old cards through the shredder — use one at work if you don't keep one at home.
Don't carry credit cards with you unless you know you're going to need them. This protects you against impulse shopping as well as theft. Keep a record of your credit cards, account numbers, and the telephone number to report a loss so that you can do so quickly if your card is lost or stolen.
Shred or cut up credit card offers you receive in the mail. Thieves have been known to go through trash to retrieve these offers, apply for credit cards in your name, and then charge large amounts before you're aware of the problem.
If Your Card Is Lost or Stolen
As soon as you realize your credit card, ATM card, or debit card has been lost or stolen, report it immediately to the bank or other issuer in order to limit your liability if the card is used fraudulently. Keep a list of your credit cards and telephone numbers in a safe place so you can access the phone number as quickly as possible.
Under federal law, if you report the loss before any unauthorized charges are made to your card, you can't be held responsible for any charges. If a thief uses your card before you report it missing, the most you will owe for unauthorized charges is $50 per card. If somebody uses your credit card number fraudulently without physically stealing the card itself, you are not liable for the charges.
Even though you called the issuer to report the loss, it's a good idea to follow up with a letter in case you need to prove that you did so. After the loss of your card, review your monthly statements carefully and report in writing any unauthorized charges. Be sure to send the letter to the billing error address and not to the payment address (unless they are the same). Lost credit cards should also be reported to each of the major credit-reporting agencies: Experian, TransUnion, and Equifax. Ask them to place a security alert on your account to intercept possibly fraudulent applications for credit.
Identity Theft
Identity theft occurs when someone uses your personal information (such as your name, social security number, or credit card number) without your knowledge, to commit fraud or theft. Thieves may apply for a credit card in your name, using your date of birth and social security number, and charge large amounts before you even know the account has been opened. When the bills aren't paid, the delinquency goes in
Another tactic used by thieves is to call your credit card company and report a change of address on your account. Your bills get redirected somewhere else, so you may not realize there's a problem while the thief is running up charges on your account. Other popular scams include establishing cellular phone service in your name or setting up a bank account in your name and writing bad checks on the account.
For more information on how to avoid being a victim of identity theft and how to recover if you do become a victim, visit these Web sites:
You can see why it's so important to be careful about how and where you discard bank statements, credit card statements, credit card offers, or any paperwork that includes your date of birth or social security number. It's a good idea to own a personal shredder and shred all documents containing personal information before putting them in the trash. Paper shredders can be purchased at an office supply store for less than $25.
If you believe you're the victim of identity theft, report it to the three credit-reporting bureaus, all of your creditors, and your local police as soon as possible so steps can be taken to control the damage.
