WWW.CONSUMER-ACTION.ORG |
Thursday, December 19, 2013
In light of
the recent news about Target’s data security breach, Consumer Action, the National Consumer Law Center and U.S. PIRG remind consumers that:
1. Your liability for fraudulent charges is
limited under federal law.
Credit Cards: Under federal law,
your responsibility for unauthorized credit card charges is limited to $50, and
in some cases would be $0.
Debit Cards: Your responsibility
for debit card fraud charges is a bit more:
- $50 if you notify the bank within 2 days.
- Up to $500 afterwards.
- Unlimited if you fail to report the fraud charges within 60 days after you receive your bank statement.
Also, since the money to pay the debit
card comes directly out of your bank account, you won’t be able to use that
money until the fraud charge is reversed.
Both VISA and MasterCard have “zero
liability” policies that limit your losses to $0, but these are voluntary
policies.
Finally, when you contact your credit card
company, don't pay a fee to receive a replacement card - even during the holiday
shopping season. Ask the issuer to waive the expedited fee to send a replacement
card. For more information on reporting card fraud, see Consumer Action's Credit Card Fraud module.
2. Check your credit report, but
don’t panic.
If you are worried that a security breach
has made you a target of identity theft, check your credit report - it's always
a good idea to do that regularly. But theft of a credit card number is unlikely
to lead to the thief opening new accounts. That’s because the key piece of
information needed for “new account” ID theft—your Social Security Number—is not
part of the credit card data.
3. Don’t pay for expensive credit
monitoring or fraud detection services.
You can check your credit report for free
once a year using www.annualcreditreport.com—no need to pay for a
monthly service.
As for fraud detection services, some of
them have been known to do questionable things. For example, one of these
companies, LifeLock, paid $11 million to the Federal Trade Commission in 2010 to
settle charges that it used false claims to promote its identity theft
protection services.
4. The strongest prevention
against ID theft after a breach is a security freeze.
A security freeze prevents your credit
report from being shared with potential new creditors. If your credit files are
frozen, a thief will probably not be able to get credit in your name. You have a
right to place a security freeze on your credit report under the law in most
states, and freezes are available to residents of all 50 states. For more
information, see:
- Consumer Action's Security Freeze module.
- NCLC identity theft tips.
- U.S. PIRG's identity theft tips.
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