Credit Cards
Although credit card fraud is certainly on the rise -- and credit card fraud on the Internet is rising even more dramatically -- many savvy Internet shoppers know that the reality is that it's actually much safer to enter your credit card number on a secure online order form than it is to give your credit card to a waiter at a restaurant. After all, what's to stop the waiter from writing down your credit card number and placing orders on the phone with it later? And research shows that the rate of fraudulent purchases made by cell phones is much higher than credit card fraud on the Net.
Nevertheless, we encourage you to take precautions when giving out any confidential information (including your credit card number) over the Internet, over the phone... or anywhere else for that matter!
Always use common sense -- it is the best rule of thumb.
Credit Card Liability
What's in Your Wallet? from Scambusters
Most of you know that if your credit card is ever lost or stolen, you're only liable for up to $50 in fraudulent charges. But did you also know that you could be liable for LESS money, under certain circumstances? And did you know that this liability law does NOT apply to debit cards?
According to the United States Federal Trade Commission, The Fair Credit Billing Act guarantees that... "your maximum liability under federal law for unauthorized use of your credit card is $50." But, if you report the loss of your credit card BEFORE fraudulent charges are made, you cannot be held responsible for ANY of those charges -- in other words, you owe nothing.
Here's another fact most people don't know: "Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use." Plus, if you're a good customer, your credit card company will often waive the $50 liability.
That's the good news. Now here's the bad news.
If your DEBIT card is lost or stolen, your liability is just $50, but ONLY if you report the loss/theft within two days after you realize your card is missing. And, if you neglect to notify your bank that your debit card has "gone missing" within 60 days after your bank statement containing the unauthorized use is mailed to you, you could lose EVERYTHING in your chequing and overdraft accounts. Also, even if you're not ultimately responsible for the debit card losses, if the theft results in your chequing account being emptied out and that causes your checks to bounce, you may still be liable for the fees.
To protect yourself against fraudulent charges on your debit card, contact your financial institution to learn about their liability policies. A few debit card issuers offer better protection than the federal government. For example, some debit card issuers offer consumers "zero liability" in cases of fraud, theft or unauthorized usage, as long as the cardholder reports the problem within two business days after discovery. And, if it takes longer than two days, these cardholders are only liable for a maximum of $50 in charges.
To paraphrase a popular TV commercial, it pays to know "what's in your wallet."
If you suspect credit card fraud:
If your credit cards are lost or stolen, contact the issuer(s) immediately.
Most credit card companies have toll-free numbers and 24-hour service to deal with these emergencies -- they are eager to avoid credit card fraud.
