BankDirect Fraud Prevention
Credit and ATM Cards: What To Do If They're Lost or Stolen
Many people find it easy and convenient to use credit and ATM cards. The Fair
Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) offer
procedures for you and businesses to use if your cards are lost or stolen.
Limiting Your Financial Loss
Report the loss or theft of your credit and ATM cards to the card issuers as
quickly as possible. Many companies have toll-free numbers and 24-hour service
to deal with such emergencies. It's a good idea to follow up your phone calls
with a letter. Include your account number, when you noticed your card was
missing, and the date you first reported the loss.
You also may want to check your homeowner's insurance policy to see if it
covers your liability for card thefts. If not, some insurance companies will
allow you to change your policy to include this protection.
- Credit Card Loss. If you report the loss before the cards are used,
the FCBA says the card issuer cannot hold you responsible for any unauthorized
charges. If a thief uses your cards before you report them missing, the most you
will owe for unauthorized charges is $50 per card. This is true even if a thief
uses your credit card at an ATM machine to access your credit card account.
However, it's not enough simply to report your credit card loss. After the
loss, review your billing statements carefully. If they show any unauthorized
charges, send a letter to the card issuer describing each questionable charge.
Again, tell the card issuer the date your card was lost or stolen and when you
first reported it to them. Be sure to send the letter to the address provided
for billing errors. Do not send it with a payment or to the address where you
send your payments unless you are directed to do so.
- ATM Card Loss. If you report an ATM card missing before it's used
without your permission, the EFTA says the card issuer cannot hold you
responsible for any unauthorized withdrawals. If unauthorized use occurs before
you report it, the amount you can be held liable for depends upon how quickly
you report the loss. For example, if you report the loss within two business
days after you realize your card is missing, you will not be responsible for
more than $50 for unauthorized use.
However, if you don't report the loss within two business days after you
discover the loss, you could lose up to $500 because of an unauthorized
withdrawal. You risk unlimited loss if you fail to report an unauthorized
transfer or withdrawal within 60 days after your bank statement is mailed to
you. That means you could lose all the money in your bank account and the unused
portion of your line of credit established for overdrafts.
If unauthorized transactions show up on your bank statement, report them to
the card issuer as quickly as possible. Once you've reported the loss of your
ATM card, you cannot be held liable for additional amounts, even if more
unauthorized transactions are made.
Protecting Your Cards
The best protections against card fraud are
to know where your cards are at all times and to keep them secure. For ATM card
protection, it's important to keep your Personal Identification Number (PIN) a
secret. Don't use your address, birthdate, phone or social security number.
Memorize the number. Statistics show that in one-third of ATM card frauds,
cardholders wrote their PINS on their ATM cards or on slips of paper kept with
their cards.
The following suggestions may help you protect your credit and ATM card
accounts.
For Credit Cards:
- Be cautious about disclosing your account number over the phone unless you
know you are dealing with a reputable company.
- Never put your account number on the outside of an envelope or on a
postcard.
- Draw a line through blank spaces on charge slips above the total so the
amount cannot be changed.
- Don't sign a blank charge slip.
- Tear up carbons and save your receipts to check against your monthly billing
statements.
- Open billing statements promptly and compare them with your receipts. Report
mistakes or discrepancies as soon as possible to the special address listed on
your statement for "billing inquiries." Under the FCBA, the card issuer must
investigate billing errors reported to them within 60 days of the date your
statement was mailed to you.
- Keep a record — in a safe place separate from your cards — of your account
numbers, expiration dates, and the telephone numbers of each card issuer so you
can report a loss quickly.
- Carry only those cards that you anticipate you'll need.
For ATM
cards:
- Don't carry your PIN in your wallet or purse or write it on your ATM card.
- Never write your PIN on the outside of a deposit slip, an envelope, or on a
postcard.
- Take your ATM receipt after completing a transaction.
- Reconcile all ATM receipts with bank statements as soon as possible.
Buying a Registration Service
For an annual fee of $10 to $35, companies will notify the issuers of your
credit and ATM accounts if your card is lost or stolen. This service allows you
to make only one phone call to report all card losses rather than calling
individual issuers. Most services also will request replacement cards on your
behalf.
Purchasing a card registration service may be convenient, but it's not
required. The FCBA and the EFTA give you the right to contact your card issuers
directly in the event of a loss or suspected unauthorized use.
If you decide to buy a registration service, compare offers. Carefully read
the contract to determine the company's obligations and your liability. For
example, will the company reimburse you if it fails to notify card issuers
promptly once you've called in the loss to the service? If not, you could be
liable for unauthorized charges.
For More Information
The following federal agencies are responsible for enforcing federal laws
that govern credit and ATM card transactions. Questions concerning a particular
card issuer should be directed to the enforcement agency responsible for that
issuer.
State Member Banks of the Federal Reserve System
Consumer and
Community Affairs
Board of Governors of the Federal Reserve System
20th
& C Sts., N.W.
Washington, D.C. 20551
National Banks
Comptroller of the Currency
Compliance
Management
Mail Stop 7-5
Washington, D.C. 20219
Federal Credit Unions
National Credit Union Administration
1776
G St., N.W.
Washington, D.C. 20456
Non-Member Federally Insured Banks
Office of Consumer
Programs
Federal Deposit Insurance Corporation
550 Seventeenth St.,
N.W.
Washington, D.C. 20429
Federally Insured Savings and Loans, and Federally Chartered State
Banks
Consumer Affairs Program
Office of Thrift Supervision
1700 G
St., N.W.
Washington, D.C. 20552
Other Credit Card Issuers
(includes retail/gasoline
companies)
Consumer Response Center
Federal Trade
Commission
Washington, D.C. 20580