A few years ago, I went through a phase where I was on the phone with the bank every couple of months to report credit card fraud. Sometimes the bank would send me a text about questionable charges. Sometimes I would notice something fishy when I went to pay my bill, and I’d have to call them to dispute the charge. I never had any problems getting reimbursed, though one time I had to explain in quite a lot of detail why I didn’t, in fact, spend money at a hotel in the same town that I live in.
I was lucky, actually. The largest fraudulent purchase was only around $300 (at Walmart) and I never had to actually fight for my money. I never paid for purchases that I didn’t make. I never had money stolen directly from my account. My debit card (the one linked to my bank account) was never compromised. My biggest annoyance was waiting a week every time I had to be mailed a new credit card.
But this isn’t something that just happens to me. In fact, in 2016, 15.4 million Americans became the victims of financial fraud and lost a total of $16 billion. You can become the victim of fraud in many ways: You could physically lose your credit or debit card and a criminal could pick it up to make purchases in store or online. You could have your credit or debit card number compromised after making a purchase, and then a criminal could use your number to make other purchases. You could have your Social Security number stolen and a criminal could use your identity to open new accounts in your name, but make all the purchases themself. That last one is probably the scariest, since you may not know it’s even happening until debt collectors come calling.
So what do you do if you become one of the unlucky ones and notice some weird charges on your statements or when you check your account online?
1. Check whether you have your card in your possession. If your card was physically stolen, you may be liable for some of the charges.
- If your credit card is missing, you may be responsible for paying up to $50 in fraudulent charges.
- If you call your credit card company and report the card as lost or stolen before any charges are made, you are responsible for $0.
- If you call your credit card company and report the card as lost or stolen after charges have been made, you are responsible for up to $50.
- If your ATM or debit card is missing, you may be responsible for paying all of the charges.
- If you call your bank and report the card as lost or stolen before any charges are made, you are responsible for $0.
- If you call your bank and report the card as lost or stolen within two days of the loss or theft, you are responsible for up to $50.
- If you call your bank and report the card as lost or stolen more than two days after the loss or theft but fewer than 60 days after receiving your bank statement, you are responsible for up to $500.
- If you call your bank and report the card as lost or stolen more than 60 days after receiving your bank statement, you are responsible for all of the charges.
2. Call the bank to report the theft and identify the fraudulent charges. As soon as you know whether your card was physically stolen or just the numbers were used fraudulently, call your bank or credit card company. Tell them that your card has been compromised, whether or not it’s in your possession, and tell them which charges were made by someone other than you.
- If your credit card number was stolen, but the card is in your possession, you are not responsible for any of the unauthorized charges.
- If your ATM or debit card number was stolen, but the card is in your possession, you are not responsible for any of the unauthorized charges if you report the fraud within 60 days of receiving your bank statement.
Once you’ve reported the fraud to your bank or credit card company, they will investigate the charges. This can take a few weeks, and you might be given a temporary credit to your account to hold you over until the investigation is complete. At this point, you’ll either get to keep the temporary credit that was refunded to you, you’ll receive a credit for the amount of the disputed charges, or you will be notified in writing that the investigation concluded that the charges were authorized, and the disputed amount will not be refunded to your account (or the temporary credit you received will be taken back). You will also receive a new card in the mail.
3. Read your statements carefully. No matter which account was compromised, keep a close eye on all of your account statements in the future. Compare receipts to charges to ensure that no fraudulent charges slip through the cracks. If you notice anything out of the ordinary, call your bank or credit card company again.
4. Consider more drastic measures. If you’re worried about your identity being compromised, you can call one of the three major credit bureaus (Equifax, TransUnion, and Experian) and ask for a fraud alert. It’s free to place a fraud alert and it can make it harder for criminals to open accounts in your name; having a fraud alert ensures that if you (or someone masquerading as you) tries to open an account, steps will be taken to confirm your identity before the account can be opened. Fraud alerts last for 90 days, but can be renewed. Extended fraud alerts, which are offered to victims of identity theft, last for seven years.
You could also ask each of the credit bureaus to place a credit freeze on your file. This essentially locks your file and prevents anyone from accessing your credit report without your permission. It is more robust than a fraud alert, because you are the almost the only one who can unlock your file—current creditors and government agencies with a court order may also gain access to your file. A credit freeze generally lasts as long as you want it to, but every time you apply for credit (apply for a new credit card, apply for a mortgage, buy a car) you will have to temporarily lift the credit freeze. It’s more of a hassle, but it is an effective way to combat identity theft. Credit bureaus do charge for credit freezes.
Stay safe and good luck!