Credit Card Fraud or Your Carelessness Can Cost You Dear

07/04/2008
Security and Protection

A stolen or lost credit card can cause serious financial problems and damage your credit pretty severely. Especially, in case of credit card fraud.

If you happen to lose your credit card or a wallet, or if your plastic is stolen, you should not panic. Though this situation is really unpleasant and troublesome, it is not as terrifying as an apocalypse. Once this happens to you, you need to keep your control and have a clear plan of actions in your head. If you do everything right, you will land on your feet and incur minimal losses or even none.

Alongside with numerous perks and bonuses that credit cards come with, banks provide credit consumers with one of the most important options in terms of credit card protection - zero liability coverage. When choosing a new plastic you should keep in mind this feature and focus not only on rewards that a cash back or a gasoline credit card can give you.

Luckily, most credit card offers come with 0% liability on unauthorized purchases. In case you become a victim of identity theft or another type of credit fraud, and the thieves use your card for purchases, you will be liable for only $50. No matter what amount of money was charged on your card.

So, what actions to take when your credit card is stolen?

First what you should do, having detected a loss or a theft of your plastic, is to inform your credit card issuer about it. The thing is that your card will remain active until the bank suspends or freezes your account. And that is dangerous. As for money losses, they are not that horrible. No matter how much money the thieves charge on your plastic, you will pay just $50. But the consequences of fraudulent activities concerning your credit history and credit score can be really harsh.

So, you need to contact your credit provider as soon as possible. You can do it by calling a toll-free number that is usually printed on your credit card statement. Credit companies provide 24/7 support, so you can call anytime.

When informing them about the loss or the theft, you will need to provide the number of your credit card account, the date of the last purchase you made, and the date when you noticed that your credit card is missing. If you have an access to credit management online, you can report a card missing through the Internet. You can also send a letter with the same information. It might do you a good turn if the credit card loss is questioned. The letter will be a good proof.

Why is it important to notify your lender about the loss? The thing is that under the Fair Credit Billing Act that protects US credit card holders, in case of unauthorized purchases your liability is limited to a payout of $50. But this takes place only in case you have managed to report the loss before an unauthorized use occurred. Otherwise, you will have to compensate all the charges.

But since your chances to report the loss on time are extremely poor, most credit card companies extend the period of time for you to inform about the card missing and to be safe from incurring liability.

So, in case you lost your card or it was stolen, stick to this plan, and you will not have to worry about your money, your credit score and credit history. Or, you should better be very careful, keep your plastics in a safe place and you will not need this plan ever.

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