Take Action Against Fraudulent Credit Card Activity

You're looking at your monthly credit card statement and notice unfamiliar charges on the account. You've checked the receipts for that billing cycle and determined that you did not make the transactions. Chances are, you have just joined the ranks of credit card fraud victims.

No matter how careful you may be with your credit cards and personal financial information, it is nearly impossible to protect yourself completely. If your cards have been lost or stolen - putting them at risk for fraudulent charges - or if you find unauthorized charges on your account, what's the next step?

Report fraudulent credit card activity and lost and stolen cards immediately

The first and most important step is to call the credit card company the moment you realize your credit card is missing or that there have fraudulent charges on your account. Most companies have toll-free numbers available 24 hours a day to report loss, theft, or fraud.

After you report the loss or questionable charges to your credit card issuer, it's a good idea to send them a letter with all the details: your account number, when you noticed the card was missing or the fraudulent charges were made, and when you called the company to report it. The credit card company is required to respond to your report in writing within 30 days.

Credit card fraud - your liability

Under the Fair Credit Billing Act (FCBA) you are responsible for only $50 per card if there has been unauthorized activity on your account. In the case of lost or stolen cards, if you report the loss before any fraudulent charges have been made, you can't be held responsible for any amount.

Different liability protection exists for ATM and debit cards through the Electronic Funds Transfer Act (EFTA). How quickly you report your loss determines your liability. If you call the card issuer before any unauthorized charges are made, you are not liable for any charges; if you report it within two business days, your liability is $50; but if you fail to report it within 60 days of receiving a statement with the fraudulent charges on it, you could be liable for $500 or as much as the total amount in question. Since this amount can be deducted from your bank account and even your line of credit, it is imperative to report the loss as soon as possible.

Monitor your credit card statements for fraudulent activity

After you have made your report, watch your credit card statements very carefully and report any further questionable activity to the card issuer. Generally, the credit card company will have blocked your account and issued you a new card number after the initial call, but it pays to keep a close eye on the account until you know the problem has been resolved.