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 losses.

If any unauthorized 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 unauthorized 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. Memorize this number. Statistics show that in one-third of ATM card frauds, cardholders 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 accounts.

For credit cards:

For ATM cards:

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 unauthorized 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 unauthorized charges.

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