“I got a call from a woman who said I need credit card loss
protection insurance. I thought there was a law that limited my liability to
$50 for unauthorized charges. But she said the law had changed and that now,
people are liable for all unauthorized charges on their account. Is that true?”
Do not buy the pitch – and do not buy the “loss protection”
insurance. Telephone scam artists are lying to get people to buy worthless
credit card loss protection and insurance programs. If you did not authorize a
charge, do not pay it. Follow your credit card issuer’s procedures for
disputing charges you have not authorized. Your liability for unauthorized
charges is limited to $50.
Credit card loss
Your maximum liability under federal law for unauthorized
use of your credit card is $50. If you report the loss before your credit cards
are used, the Fair Credit Billing Act (FCBA) says the card issuer cannot hold
you responsible for any unauthorized charges. If unauthorized charges occur on
your cards before you report them missing, the most you will owe is $50 per
Also, if the loss involves your credit card number, but not
the card itself, you have no liability for unauthorized use.
After the loss, review your billing statements carefully. If
they show any unauthorized charges, it is best to send a letter to the card
issuer describing each questionable charge.
Again, tell the card issuer the date your card was lost or
stolen, or when you first noticed unauthorized charges, and when you first
reported the problem 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.
Worthless credit card loss protection offers are popular
among fraudulent promoters who are trying to exploit unsure consumers. As a
result, the Bureau of Consumer Protection is cautioning consumers to avoid
doing business with callers who claim that:
liable for more than $50 in unauthorized charges on your credit card account.
credit card loss protection because computer hackers can access your credit
card number and charge thousands of dollars to your account.
computer bug could make it easy for thieves to place unauthorized charges on
your credit card account.
from “the security department” and want to activate the protection feature on
your credit card.
Protecting your cards
If your credit card is lost or stolen, it can certainly be
inconvenient. But beware of crooks that use scare tactics and false information
to sell protection that consumers do not need.
Your credit card issuer may offer extra protection for free.
Most card issuers have voluntary policies to remove unauthorized charges
completely if consumers report them as soon as they discover them. Ask if you
are not sure what your issuer’s policy is.
Watch out for impostors. Someone may claim to be connected
with your credit card issuer and ask to “verify” your account number to make
sure you are protected. Your real credit card issuer does not need your account
number; it already has it.
Be cautious about emails that offer credit services. Almost
all unsolicited emails are fraudulent.
Protect yourself against credit card fraud. Do not leave
your card lying around your home or office where others can see it, and do not
lend it to anyone. If you want someone else to be authorized to use your
account, make those arrangements through you card issuer. Only give your credit
card number when you are actually making a purchase.
Check your credit card bills carefully as soon as your
receive them. Follow the instructions on your bill for questioning or disputing
charges. Do not send a note with your payment, since a separate department
usually handles disputes. Make copies of any forms or letters that you send
your credit card issuer about the dispute, and be sure to pay the rest of your
bill on time.
Be prepared in case your card is lost or stolen. Keep a file
with your credit card issuer’s name and telephone number and your account
number. Have this separate from your purse or wallet in case it is stolen, too.
The Bureau of Consumer Protection advises consumers not to
give out personal information – including their credit card or bank account
numbers – over the phone or online for any product unless they are familiar
with the business and have initiated the contact.
Scam artists can use your personal information to commit
fraud, such as identity theft. ID theft occurs when someone uses some piece of
your personal information, such as your credit card number, Social Security
number, mother’s maiden name, or birth date, without your knowledge or
permission to commit fraud or theft – an example is when an identity thief uses
your personal information to open a credit card account in your name.