Seeing an unrecognized charge on your credit card, or an unauthorized withdrawal in your bank account can be the start of a very challenging ordeal. If you act fast though, it may not be too bad. Here are the steps you can take if your credit card or debit card has been stolen.
Introduction to stolen Credit and Debit Cards
A stolen credit card is usually not too terrible to deal with, unlike a stolen debit card (see below), which can be one of the worst things to have happen to you. Make sure you act fast though. All the major credit card providers have a $0 liability policy for stolen cards, and your liability is further protected by law. The Fair Credit Billing Act limits your liability to just $50, as long as you report the fraud within 60 days.
While credit card companies have gotten pretty good at recognizing fraud, they’re not perfect. In fact, there’s still around $30 billion per year of fraudulent credit card transactions. That number keeps rising each year as more and more credit card numbers are leaked online by hackers, and as the sophistication of criminals continues to increase. The sad truth is that credit card theft is very difficult to prosecute, which means that most credit card fraudsters get away. If you’re the victim of credit card or debit card theft, there are a few steps you can take to limit the damage and get back to using your card.
Debit Cards have different liability protections from credit cards.
The biggest downside to relying on debit cards for your everyday purchases is that you’re liable for up to $500 if you don’t report a fraudulent transaction within 2 days. Further, if you wait longer than 60 days to report a fraudulent transaction, you could be liable for 100% of it. It really makes sense to leave the debit card at home, and use a credit card for your everyday needs for most people – as long as you pay the card in full each month!
Steps to take for a stolen credit card or debit card:
Step 1. Call your bank or card issuer immediately. They can stop any further transactions, and initiate disputes on your behalf for any fraudulent transactions.
This is the first step to limit the damage from a stolen credit card. If the thief knows your credit card number, take steps to make sure they can’t use it. If the thief has your username and password, they may try to lock you out of your online accounts. Make sure you change the password on any sites that may share that username or password (this is why you shouldn’t use the same password on multiple sites). Always use a unique device name and password for each device. Use a secure operating system across all devices, and have up to date anti-virus software installed.
Since money can go missing with a debit card, it can be a longer and more complicated process to get that money back in your account. That’s why it’s important to use your debit card very carefully. Some people choose not to use their debit cards very often for this reason. Getting a credit card company to eliminate fraudulent transactions is typically much easier to do.
Step 2. Check all your other accounts to ensure that nothing else has been compromised.
This includes any bank accounts, investment accounts, social media, and other websites that may have sensitive information. Often, if a fraudster has access to one account, they can have access to other accounts you own. Make sure you change any similar passwords and pay close attention to your accounts over the next several weeks.
Step 3. Alert the credit monitoring agencies.
This will prevent any new credit from being issued against your identity, and can help you in disputing any negative impacts to your credit report. Try to keep your credit score in good standing, even if your credit score has been affected by a fraud or security breach. When you’re ready to apply for credit again, look at the information on your past credit report to see if there’s anything you can fix. If your identity has been stolen, make sure you update your personal and account information to remove any accounts or activity you don’t recognize. Check the names on your files. Consider adding a victim flag to your file if late fees or negative information are on your file.
Step 4. Monitor, and consider signing up for an identity monitoring service.
For the next several months following a lost wallet or stolen identity, you should carefully monitor your accounts for unusual activity. Oftentimes thieves have access to more than one account and can space their activities out to try to avoid detection. It’s up to you to be diligent!
That is, unless you sign up for an identity monitoring service. There are several excellent options available, and you can explore a few of the options below. Most are very affordable and can put a fast stop to any identity theft problems.
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Preventing Credit Card Theft:
An ounce of prevention is worth a pound of cure. Preventing credit card theft starts with protecting your personal information. Never share your personal information with anyone, even people who claim to be calling from your bank. Credit card numbers, expiration dates, and CVVs are private and valuable. You should never share any part of them with anyone over the phone unless you initiated the conversation, and never over the internet unless you’re on a secure website that you recognize. Don’t ever take or share a picture of your credit card. If you lose your phone, you might also lose access to your credit cards. Secure online payments are important, too. When you order something online, make sure the payment is securely handled using HTTPS (most browsers will display a lock or key icon in the status bar). Include a secure password on every website you visit, like your Facebook or Amazon. Make backups of important files. If you find a piece of data for sale online or on an app, report the sale to the site’s security team or delete the data. Fight fraud, and you make it harder for other people to steal your information. Shop responsibly. Some stores use fake credit card numbers or try to steal customer information. Never put your personal information in the hands of a website that’s not secure, and you don’t recognize.
Encrypt your data. Backup your files on a secure cloud service like Google Drive or Dropbox. Don’t store your passwords in plain text online or on apps. Use one secure password for multiple accounts, and keep that password secret. Many online services offer two-factor authentication, where you have to provide additional information, like a phone number or email, before you can log in.
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What happens next?
After you report your credit or debit card stolen, the bank or card issuer will deactivate the stolen card, and re-issue you a new card. In some extreme cases, they may choose to close your old account and open a new account. That’s very unusual though.
In most cases, your new card will arrive in the mail within a few days. Make sure you follow the activation instructions for your card prior to using it.