How should I notify my credit card issuer about unauthorized use of my card?

If you believe that someone has used your credit card without your permission or knowledge you need to take action immediately. By acting quickly you can limit or eliminate your liability for the costs they run up. The steps will take a little time but, can save you potentially thousands of dollars in the long run.

Do This First!

The Federal Trade Commission says that you should report the loss to your credit card company immediately. Of course, this will be easier if you have those account numbers and contact details on file. This information is also on your billing statements with a toll free number to use if your card is lost or stolen. If you don’t have these, then you can go online to find a number to contact your provider.

If you report your card as stolen before unauthorized charges are applied you can’t be held responsible for future unauthorized purchases. If you just noticed that your card was missing due to the charges on the statement, then you can be held accountable for up to $50.

Debit cards do not carry the same guarantee by law. If the unauthorized charge is on a debit card then your liability is also tied to how quickly your report it, but you carry a higher burden. If you report the charge in two days you will be responsible for $50, if it is after two business days then you can be held responsible for up to $500, and if it takes 60 days or more to report the unauthorized charge then there is no limit. The bottom line is to report the charge immediately.

Contact the Authorities and Businesses

It’s also a good idea to contact the local authorities if you believe your card was stolen. In some cases you may still have possession of your card and only notice charges on your monthly statement. If this is the case, you will also want to contact the business who ran your credit card. At this point a fraud investigator will have been assigned to your case from your credit card company. Make sure you give this person any of the information you get from either of these sources.

Another good idea is to contact the three credit reporting bureaus and ask them to place a fraud alert on your account. The three agencies are Equifax at 1-800-525-6285, Experian at 1-800-301-7195 and TransUnion at 1-800-680-7289. You can also contact the Social Security Administration on their consumer fraud line at 1-800-269-0271. By alerting these entities you can stop thieves in their tracks before they rack up money on your card. It is also a good idea to utilize a credit monitoring service that provides free credit reports.

Your online transactions are protected by the Fair Credit Billing Act which, in addition to the federal law that says you can’t be charged over $50 per credit card for those unauthorized purchases, offers some other protections. This law gives consumers the ability to dispute billing mistakes make by your lender and to refuse payment for purchases that are not satisfactory.

Precautions to Lower Risk

If you take the steps above you will limit your liability for any purchases that unscrupulous people put on your cards. It’s also a good idea to exercise some precautions in the future. First of all, when you get a new credit card, make sure the company fraud protection in place. You can use the Credit Card “Chaser” tool to see what sort of protection different companies are willing to offer before you make a final decision.

Also, always keep your credit card in your line of sight. Restaurants where a waiter needs to take your card to a remote location to process the information are one place where your card data can be discreetly lifted. If this is a concern, ask for a manager to run the card or accompany the waiter while they run in. At the end of the day, paying attention to your purchases, always knowing where your card is, and taking prompt action when you notice an unauthorized charge are all important to your security.