Knowing what actually constitutes fraud, and what to do when it happens, is the best way to protect yourself from additional bogus charges, and potential liability for not reporting it in a timely manner.
If you spot an unauthorized purchase on your credit or debit card statement, will you know what to do, who to call, and how to protect your account? There’s a good chance your cards have been or will be compromised, too.
Credit card fraud is a type of identity theft. Although it can be scary and upsetting, you can empower yourself with information. Know more about this type of crime and what to do if it does occur, and know how to file a claim so you aren’t responsible for someone else’s charges. Also, take steps to prevent it from it happening in the first place. There are many ways you can thwart would-be thieves.
What is credit card fraud?
Credit card fraud is any transaction not authorized by you, the account owner. The charges should not be advantageous to you in any way. For example, if your spouse went into your wallet without your knowledge and used your credit card to pay the phone bill, that’s not a reportable case of fraud. Yes, it’s an unauthorized charge, but you benefited from it. Nor is it fraud if you forgot about making a charge or were confused when you made it.
How to file a card fraud claim
If you believe that you’ve been a victim of fraud, follow the steps to rectify the situation by filing a claim.
1. Report the fraud to your credit issuer
Contact your credit card issuer immediately. If you call, there is usually a prompt that allows you to be connected to the fraud department, but if not, speak with the representative. In either case, be prepared to review the transaction(s) in detail. Know the merchant, the amount spent and the date the transaction occurred. Depending on the creditor, you may also be able to report the fraud online or via the mobile app.
2. Keep good records
Once you report the fraud, the issuer will open an investigation. A representative will contact you later, if necessary. If you called, keep a record of the date, the person you spoke to and any notes about the conversation. If you filed the fraud claim online, take a screenshot or print out the confirmation page for your records. Most issuers will give a provisional refund at the time the claim is submitted.
3. File a police report if you know the fraudster
In general, you don’t need to file a police report, but if you know the perpetrator, it could be necessary. The merchant may produce evidence that an item was ordered and shipped to your home address. A police report can be proof that shows you not only didn’t make the charge, but didn’t benefit from the purchase. A police report may also be requested if the charges are especially high.
Visit the Federal Trade Commission’s IdentityTheft.gov website to file an identity theft report that law enforcement agencies can use in their investigation. Then, if your credit issuer requests more information to substantiate your claim, you can contact your law enforcement agency to obtain the report.
In the event that the issuer agrees that you were a victim of fraud, the account will likely be closed. The issuer will send you a new card with a fresh account number that you can activate and use.
In most cases you won’t be on the hook for fraudulent charges. The Fair Credit Billing Act limits liability to $50, but many credit issuers will waive the entire amount. Act fast, though. You have 60 days from the date you receive your credit card bill to dispute the charge. The issuer then has 30 days to acknowledge that they received your claim. The investigation can take 60 days, and while it’s ongoing, the issuer can’t collect payment for the charge, add interest to it or report you as late to the credit bureaus (if it’s because of the fraudulent charge).
Protect yourself from fraud
Although the process of filing a claim is fairly simple, it can also be time-consuming. It is always better to take preemptive action. Here are some strategies that will make it more difficult for a credit card thief to commit fraud:
- Keep your credit cards in sight or in a safe place. Your credit card contains all the information someone other than you can use, so you never want to give a thief the opportunity to take your card shopping.
- Report lost or stolen cards immediately. Before a fraudster has a chance to use your card, contact your issuer. You can have the account suspended rather than closed. If or when you find it, you can contact the issuer to allow you to use the card again.
- Opt for paperless statements. If you get your credit card statements mailed to you, anyone viewing them will be able to obtain your account numbers and other personal information and can make online and phone charges. Have the statements emailed to you instead. Once you’ve viewed them, hit delete.
- Only shop from secure e-commerce sites. The website should start with HTTPS — the “S” stands for secure. And while it’s easier for future shopping to have your card number stored on the website, reconsider. If someone steals your computer or device, they’ll be able to make charges.
- Check for skimmers. One way credit card thieves steal account information is with a skimmer, which is a device they attached to ATMs and fuel pumps. Before inserting your card, take a look at it. If it appears tampered with or has extra plastic that sticks out, avoid using it — and notify the company.
- Get a call from your credit issuer? Call them back from the official number. If you get a call from your credit card issuer alerting you about a problem, explain that you will call them back from the number on the back of your card or from the website. Never give your account numbers or personal identification information to anyone who calls you.
There’s no reason to panic when your card has been fraudulently used. Just take swift and correct action. While you can’t stop committed credit card thieves from conducting their illegal business, you can definitely make it harder for them — and they may just decide to move on.