Victim of Fraudulent Credit Card Charges? Know Your Rights
Credit card fraud was the most prevalent form of identity theft in 2017, with almost 140,000 reported cases in the U.S., according to the Federal Trade Commission (FTC). And the problem appears to be on the rise: The incidence of fraud reported on existing accounts was up 20% over the prior year.
LendingTree’s own research suggests that you are more likely to be hit by fraud if you live in a bigger city. A recent study of 7 million LendingTree users found that:
- The average rate of fraud alert requests among all cities was 6.4%.
- Las Vegas and Houston tied for the highest rate of fraud alerts, at 13.6%.
- Miami and New York were close behind, at 12.9% each.
- Rochester, N.Y. had the lowest rate of people requesting fraud alerts, at 2%. Nearby Buffalo, N.Y. had a rate of 2.6%.
What should you do if you are a victim of credit card fraud or identity theft? Let’s take a look at your rights and options.
Are you responsible for fraudulent credit card charges?
The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) offer consumers protection against credit card fraud.
The FCBA limits your liability for fraudulent or unauthorized use of your credit to $50. If your card is lost and you report it before the card is used, your liability is zero. If your credit card number — but not the physical card — is stolen, you are also not responsible for any unauthorized charges.
Protections and liability may vary among different card issuers, so you would be wise to review and understand the rules and procedures for your particular issuer.
What should you do if you are the victim of credit card fraud?
There are a number of steps to take if you find that you are the victim of credit card fraud. Experian, one of the three major credit bureaus, suggests the following:
Contact your issuer. Contact the credit card company immediately. All credit card companies are bound by federal rules under the FCBA and other laws, and they may have their own additional protections. Don’t wait on this — contact them as soon as you suspect or become aware that you are the victim of fraud. They can take the first steps to protect you from fraudulent charges.
Change passwords and PINs. Be sure to change any online passwords and PINs to prevent further fraud. It’s good practice to do this every few months regardless of whether you have been the victim of fraud.
Monitor your activity. Monitor the activity on your card closely to catch any additional fraudulent activity so that you can take swift action. This is especially important if you aren’t sure how the fraud was committed.
Monitor bank statements. Monitor your bank statements closely and alert your bank to any suspicious activity immediately.
Check your credit report. Request a free copy of your credit report. You are entitled to one free copy from each of the major credit bureaus annually and can get a copy at AnnualCreditReport.com. You can also put a fraud alert on your account, and you will get a free credit report when you do that. Often there will be signs in the form of new accounts that you never opened on your credit report. (You can also get help from a credit repair agency.)
How to avoid credit card fraud
Unfortunately, fraudsters and identity thieves keep getting more sophisticated, so no avoidance measure is perfect or fool-proof. But there are some steps you can take to reduce your risk of exposure to credit card fraud:
Do not lend out your card. Protecting your card starts with some common-sense steps, such as not giving your card to anyone, including family members, friends, roommates, etc. It’s good to have people you trust, but even trusted friends and family members can disappoint. You can also never be sure how well they will safeguard your card. Lending out a credit card to someone else is just not good practice. Along the same lines, don’t tell anyone your card number, especially someone who calls or emails you randomly asking for it.
Keep your card safe. Keep your card in a safe place. Don’t leave it lying around in the open at home or especially at work. Why tempt fate?
Separate credit cards. Carry your cards separately from your wallet or purse. If someone steals either one, they won’t get your credit cards, saving you a lot of frustration and putting you at lower risk for fraud.
Save receipts. Save purchase receipts and compare them against your statements. This is a good practice anyway, as it forces you to verify that all charges on your statement are valid. This can be a good way to detect fraud early.
Notify your issuer if you’re moving. Notify your card issuer if you will be moving and change your address promptly. Also notify them if you will be traveling for an extended period of time.
Report suspicious activity. Promptly report any suspicious or unfamiliar charges on your account to the card issuer. Again, this is a good way to detect fraud. In some cases, there could be a charge that is legitimate that you just don’t recognize. But more often than not, those charges are a sign of fraud.
Credit card fraud is a rampant and growing element of identity theft. Scammers and fraudsters are becoming more sophisticated all the time, putting cardholders at greater risk. Don’t wait until you become a victim to protect yourself.