Tips: React To Credit, Debit Card Theft
Better Business Bureau (BBB) is warning consumers that even if their credit or debit card never leaves their sight, they could still become a victim of fraud or identity theft and need to be prepared to act quickly to minimize the damage.
The 2008 Identity Fraud Survey Report from Javelin Strategy & Research states that fraud is declining in the U.S. -- down 12 percent from 2006 -- and that 8.1 million Americans were actually victims of identity fraud. However, the Identity Theft Resource Center, says 127 million personal records were reported compromised in the U.S. in 2007, a six-fold increase over the previous year.
“Stolen belongings continue to be the main source of personal identity fraud in the U.S., but businesses continue to report alarming security breaches that expose millions of Americans’ identities and financial information to would-be thieves,” said Steve Cox, spokesperson for the BBB. “Identity thieves are certainly stealing some wallets, but the bigger prizes are the massive customer databases with outdated encryption security that sit like pots of gold at the end of the cyberspace rainbow.”
In late 2007 owners of the T.J. Maxx and Marshalls retail chains, reported that tens of millions of credit and debit card owners were exposed to fraud when hackers stole data while it was being transmitted wirelessly. In January, the personal information -- including 150,000 social security numbers -- of more than 650,000 customers of JC Penney and other major U.S. retailers was compromised when a computer tape went missing from a data storage warehouse run by Iron Mountain Inc.
BBB is encouraging consumers to become savvier and keep a close eye on their credit and debit card statements for suspicious activity. If they find their card has been stolen or if they have noticed fraudulent charges on their accounts, BBB offers the following advice that will help consumers resolve the issue as quickly as possible:
Step One: Contact the Issuer.
Credit card issuers typically have a 24-hour hotline for consumers to report fraud and theft. By law, a consumer’s maximum liability is $50 per credit card; once they have reported a loss or theft of a credit card to the issuer, consumers have no further responsibility for unauthorized charges. If the fraud involves a person’s credit card number, but not the card itself, the consumer has no liability for unauthorized use. If an ATM or debit card is lost or stolen, the amount of money someone could lose depends on how quickly they alert the issuer – if they wait too long, they could lose everything in the account.
Step Two: Contact the Authorities.
If a credit or debit card has been stolen or if the consumer has noticed fraudulent charges on their account, they can file a report with the local police. The consumer will want to get a copy of the police report to confirm the nature of the fraudulent charges with the issuer and the credit reporting bureaus, and should file reports with the Federal Trade Commission online at www.creditreport.org/what-to-do-when/
Step Three: Contact Credit Reporting Bureaus.
There are three credit bureaus that monitor activity on consumer credit accounts: Equifax, Experian, and TransUnion. The three bureaus can flag, or place an alert on an account for fraudulent activity, which then requires that they contact the cardholder before any new lines of credit are opened. Consumers can also ask to have an account frozen -- which means their credit history can’t be reviewed by lenders and prevents new lines of credit from being opened -- but keep in mind it may take several days to unfreeze accounts in the future.
Step Four: Stay Vigilant.
It’s a good idea for consumers to follow up calls to their credit card issuer or credit reporting bureaus with a letter outlining key details and summarizing when they alerted the issuer and bureau to the loss or fraud. As a victim of ID theft, consumers can receive a copy of their report free-of-charge and should review credit reports with all three bureaus for any suspicious activity. Lastly, it is important that consumers continue to keep a close eye on their credit card statements, bank accounts and credit reports well into the future for any suspicious activity.