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Protect Yourself Against Credit Card Fraud

Your credit is your financial reputation. As such, you should protect it in any way possible, just as you would protect your personal reputation. In recent years, credit card fraud has risen; in fact, many financial institutions and other credit issuers have spent millions of dollars trying to fight this problem.

Protection from Credit Card Fraud

However, your diligence in this area is actually your best defense against fraud. Take a moment to review these important guidelines given by the Federal Trade Commission (FTC) to help protect your credit and your financial reputation:

Sign your cards as soon as they arrive. Some people believe they should put “ask for photo identification” on the back of their card instead of signing it; this is not recommended by the FTC and other experts in this area. If a thief has your card without a signature and fake identification with your name on it, what is to stop him/her from using the card?

Carry your cards separately from your wallet. Many people carry their cards in a zippered compartment in their purse.

Keep a record of your credit card information. It is important to keep a record of all your credit card numbers, their expiration dates, and the phone number and address of each credit card issuer in a safe and secure place for future reference.

Keep your eye on your card during a transaction. In most cases, you will see an entire transaction take place when you use your credit card. Stay focused on the transaction and what the merchant is doing with your card. Additionally, get your card back as quickly as possible.

Carry a limited amount of credit cards. Only carry one or two cards in your wallet at any given time; this will limit your exposure to any type of loss.

Void and destroy carbons. You should void incorrect receipts and destroy carbons immediately. In fact, it is a good habit to actually shred anything relative to your account that you do not need to keep. Never let a merchant or other individual save your carbon and destroy it for you; take that responsibility upon yourself.

Review monthly statements promptly using saved receipts. You should open your bills promptly and review them thoroughly with your saved receipts. If you find any discrepancies, report them immediately (and in writing) to your card issuer. If you don’t receive your billing statement in a timely fashion, notify your card issuer immediately.

Report change of address. Notify your card issuer of any change of address prior to that change; you do not want your statement going to your old address.

Protect your account number and PIN.

Never share cards with others. You should never share your credit cards with anyone else; even if it is a trusted friend.

Beware of scams. If you receive a letter or someone calls from a company stating they will protect you from credit card fraud if you provide them with all of your credit and other personal financial information, don’t do it. Talk to your credit card issuer about fraud protection plans they have and utilize their services. Furthermore, if an offer or advertisement seems to be “too good to be true,” it probably is. Don’t provide any information to anyone requiring you to pay a fee to participate in a lottery or to activate a new credit card.

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Annual Credit Report

One of the most important things you can do is review your credit report on an annual basis. By law, you are allowed to obtain one free credit report per year, so take advantage of that option. If you find anything out of order on your report, contact your credit agency and/or your credit issuer immediately.

For more information about receiving a free credit report, go to www.annualcreditreport.com.

Reporting Credit Card Fraud

If you find that you are a victim of credit card fraud, report it as soon as possible to your credit card issuer. Under the Fair Credit Billing Act (FCBA), the maximum liability for unauthorized use of your credit card is $50. And, if the loss involves only your credit card number (not your card), you are not responsible for any unauthorized use.

Reporting a Lost Credit Card

The law states that if you report the loss before your credit cards are used fraudulently, you will not be liable for any unauthorized charges; therefore, it is in your best interest to report lost or stolen cards to your credit issuer immediately. Many credit card issuers have a toll-free number for you to call, and you should then follow-up your initial contact with a letter that includes the following:   

  • Your account number;
  • When you noticed the card was missing or misused; and
  • The date you first reported the issue.

Additionally, you may also want to check with your homeowner’s insurance policy to see if it includes liability for credit card theft.

Your diligence in protecting your credit card by following these important suggestions, and reporting any sort of unauthorized use as soon as possible, will only enhance your credit reputation in the future.

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