What should I do if someone steals my credit card information?

The first thing anyone should do if his or her credit card is lost or stolen is to report it! New credit card regulations minimize the liability of the cardholder as long as the theft is reported promptly. The maximum out-of-pocket expense is $50 and in most cases, the cardholder will suffer no losses whatsoever. Credit card replacement is usually free.

Most credit card companies operate 24-hour toll free phone service lines, where cards that have been lost or stolen can be reported. In many cases, these reports can also be made instantly on the card issuer’s website, if the card user has opened an on-line account.

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However, identity theft, stealing someone’s account number or other credit information, can often go unnoticed and cause serious financial harm to the account holder. Before applying for a credit card, it is important to review all account terms.

D0 new laws help protect consumers against credit card fraud?

Yes, the Credit Card Act of 2009 protects consumers from losses suffered when their credit card is lost, stolen, or otherwise used without their knowledge or permission. The Act also reduces amounts that may be charged if a cardholder makes a late payment or exceeds his credit limit. More information about this Act can be obtained by visiting the Federal Reserve website.

Rate increases must be explained and 45-day notice given before card issuers may execute new interest rate schedules. Consumers also have the right to refuse changes to their credit accounts, and may elect instead to pay off any existing balances under the original credit terms. The Act also requires that payment dates and times be consistent.

What else can I do following the loss of a credit card?

It can be helpful to follow up any telephone or web report with a letter detailing the account information and circumstances surrounding the loss or theft of the card. Cardholders should review their bills carefully each month to make sure there are no unauthorized charges.

If such charges are found, it is again a good idea to submit a letter to the credit card company providing details of each disputed charge. Some homeowners’ insurance policies also cover losses associated with card thefts. In that case, you should copy your insurance company on any correspondence to the credit card issuer in this regard.

What precautions can I take to avoid identity theft?

The first line of defense against fraudulent credit card use and identity theft is to keep your credit cards secure. Do not share your account passwords or PIN numbers with anyone. Keep all financial records in a safe place.
When creating PIN numbers avoid using common numbers such as:

Birthdates
Phone numbers
Social security numbers
Addresses

Never keep cards and PIN or password information together in the same location.

Are ATM and debit cards protected in the same way as credit cards?

No! ATM cards are covered by a separate set of rules. In order to limit personal liability to $50, the loss of an ATM card must be reported within two business days. If not reported within two days, losses could reach $500 if there have been unauthorized transfers.

Under certain circumstances, not reporting a lost or stolen card at all could result in unlimited financial loss, to the extent of the account balance and any overdraft lines that might be attached. These rules pertain to stolen account information as well as the card itself. Again, it pays to monitor account statements carefully for any unauthorized use.

What other steps can I take to prevent losses?

Follow these steps to keep your information safe:

Don’t give your account information over the phone unless you know who you are dealing with
Don’t put your account number or other information on the outside of an envelope
Draw lines through blank spaces on charge slips or debit receipts so the amount can’t be changed
Save receipts, to check against monthly billing statements
Promptly open monthly statements and check against receipts. If there are discrepancies, report them immediately. Card issuers are required to investigate errors reported to them within 60 days of your receipt of their bill.
Destroy old cards, cutting up account numbers thoroughly
Keep a separate record of account numbers and expiration dates along with contact information for each card company
Carry only the cards you need and leave others in a secure place

The Federal Trade Commission offers additional helpful tips to keep your credit cards secure.

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