Lost Or Stolen : Credit And ATM Cards

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Lost or Stolen Credit and ATM Cards


Increasingly, people find it convenient to shop with credit cards or to
bank at automated teller machines (ATMs) with ATM cards. But the ease with
which these cards can be used also makes them very attractive to thieves.

Loss or theft of credit and ATM cards is a serious consumer problem.
However, two federal laws, the Fair Credit Billing Act (FCBA) and the
Electronic Fund Transfer Act (EFTA), establish procedures for you and your
creditors to follow to resolve problems with credit cards and electronic fund
transfer accounts. This brochure explains what to do if any of your cards are
missing or stolen, suggests how to protect your cards, and explains what you
can expect from a credit card registration or protection service.

Limiting Your Financial Loss

There are at least two good financial reasons for you to report the
loss or theft of your credit and ATM cards quickly. First, the sooner you
report the loss, the more likely you will limit your liability if someone
uses your card without your permission. Most card fraud occurs within the
first 48 hours after a card is stolen.

Second, the sooner you report any loss, the more card costs in general
can be kept down. You pay higher interest rates and annual fees because card
fraud costs issuers hundreds of millions of dollars each year.

If any of your cards are missing or stolen, report the loss as soon as
possible to your card issuers. Some companies have toll-free or WATS numbers
printed on their statements and 24-hour service to accept such emergency
information. For your own protection, you should follow up your phone calls
with a letter to each card issuer. The letter should give your card number,
say when your card was missing, and mention the date you called in the loss.

You may wish 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 current policy to include protection for card

Credit Card Loss. If you report the loss before these cards are used,
the FCBA says the card issuer cannot hold you responsible for any
unauthorised charges. If a thief uses your cards before you report them
missing, the most you will owe for unauthorised charges on each card is $50.
This is true even if a thief is able to use your credit card at an ATM
machine to access your credit card account.

However, it is not enough simply to report your credit card loss. After
the card loss, review your billing statements carefully. If your statements
show any charges not made by you, send a letter to the card issuer describing
each questionable charge on your account. Again, tell the card issuer the
date your card was lost or stolen and when you 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 is used
without your permission, the EFTA says the card issuer cannot hold you
responsible for any unauthorised withdrawals. If unauthorised use occurs
before you report it, the amount you can be held responsible for depends upon
how quickly you report the loss to the card issuer. For example, if you
report the loss within two business days after you realise your card is
missing, you will not be responsible for more than $50 for unauthorised use.

However, you could lose as much as $500 because of an unauthorised
withdrawal from your bank account if you do not tell the card issuer within
the two business days after you discover the loss. And, you risk unlimited
loss if, within 60 days after your bank statement is mailed to you, you do
not report an unauthorised transfer or withdrawal. That means you could lose
all the money in your bank account and the unused portion of your maximum
line of credit established for overdrafts.

If any unauthorised transactions appear on your bank statement, report
them to the card issuer as soon as you can. As with a credit card, once you
have reported the loss of your ATM card you cannot be held liable for
additional amounts, even if more unauthorised transactions are made.

Protecting Your Cards

The best protections against card fraud, of course, are to know where
your cards are at all times and to keep them secure. For ATM card protection,
it is important to keep your Personal Identification Number (PIN) a secret.
Memorise this number. Statistics show that in one-third of ATM card frauds,
card holders wrote their PINS on their ATM cards or on slips of paper they
kept with their cards.

The following suggestions may help you protect your credit and ATM card

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

Draw a line through blank spaces on charge slips above the total so the
amount cannot be changed.

Do not sign a blank charge slip unless absolutely necessary.

Rip up carbons from the charge slip and save your receipts to check
against your monthly billing statements.

Open billing statements promptly and compare them with your receipts.
If there are any mistakes or differences, report them as soon as possible to
the special address listed on the billing statement for "billing
inquiries." Under the FCBA, the card issuer must investigate billing
errors if you report them within 60 days of the date your card issuer mailed
you the statement.

Keep in a safe place (away from where you keep your cards) a record of
your card numbers, expiration dates, and the telephone numbers of each
credit-card company for the emergency of reporting losses.

Carry only those cards that you regularly need, especially when

For ATM cards:

Select a PIN (personal identification number) that is different from
other numbers noted in your wallet, such as your address, birth date, phone,
or social security number.

Memorise your PIN.

Do not write your PIN on your ATM card or carry your PIN in your wallet
or purse.

Never put your PIN on the outside of a deposit slip, an envelope, or on
a postcard.

Examine all ATM receipts and bank statements as soon as possible.

Buying a Card Registration Service

Many companies offer card registration and protection services that
will notify all companies where you have credit and ATM card accounts in case
your card is lost or stolen. With this service, you need make only one phone
call to report all card losses instead of calling each card issuer
individually. Also, most services will request replacement cards on your
behalf. Registration services usually cost $10 to $35 yearly.

Purchasing a card registration may be a convenience to you, but it is
not required by card issuers. The FCBA and the EFTA give you the right to
contact credit card companies and ATM card issuers directly in the event of
loss or suspected unauthorised use.

If you do decide to buy a registration service, compare offers and look
for one that will best suit your needs. Read the service contract carefully
to check the company's obligations and your liability. For example, will the
company reimburse you if it fails to notify charge card loss promptly after
you report the loss? If not, you could be liable for unauthorised charges.

For More Information

For additional information about credit or ATM card fraud or credit
card billing problems, send for: Credit and Charge Card Fraud; Fair Credit
Billing; or Credit Billing Blues. These brochures are available free.

Write to:
Public Reference,
Federal Trade Commission,
Washington, D.C. 20580.

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
Consumer Affairs Program
Office of Thrift Supervision
1700 G St., N.W.
Washington, D.C. 20552

Other Credit Card Issuers
(includes retail/gasoline companies)
Division of Credit Practices
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580

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