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Credit
and ATM Cards:
What To Do If They're Lost or Stolen
June 1997
Many people find
it easy and convenient to use credit and ATM cards. The Fair Credit Billing
Act (FCBA) and the Electronic Fund Transfer Act (EFTA) offer procedures
for you and businesses to use if your cards are lost or stolen.
Limiting
Your Financial Loss
Report the loss or
theft of your credit and ATM cards to the card issuers as quickly as possible.
Many companies have toll-free numbers and 24-hour service to deal with
such emergencies. It's a good idea to follow up your phone calls with
a letter. Include your account number, when you noticed your card was
missing, and the date you first reported the loss.
You also may want
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 policy to include this protection.
- Credit Card Loss.
If you report the loss before the cards are used, the FCBA says
the card issuer cannot hold you responsible for any unauthorized charges.
If a thief uses your cards before you report them missing, the most
you will owe for unauthorized charges is $50 per card. This is true
even if a thief uses your credit card at an ATM machine to access your
credit card account.
However, it's not enough simply to report your credit card loss. After
the loss, review your billing statements carefully. If they show any
unauthorized charges, send a letter to the card issuer describing each
questionable charge. Again, tell the card issuer the date your card
was lost or stolen and when you first 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's used without your
permission, the EFTA says the card issuer cannot hold you responsible
for any unauthorized withdrawals. If unauthorized use occurs before
you report it, the amount you can be held liable for depends upon how
quickly you report the loss. For example, if you report the loss within
two business days after you realize your card is missing, you will not
be responsible for more than $50 for unauthorized use.
However, if you don't report the loss within two business days after
you discover the loss, you could lose up to $500 because of an unauthorized
withdrawal. You risk unlimited loss if you fail to report an
unauthorized transfer or withdrawal within 60 days after your bank statement
is mailed to you. That means you could lose all the money in your bank
account and the unused portion of your line of credit established for
overdrafts.
If unauthorized transactions show up on your bank statement, report
them to the card issuer as quickly as possible. Once you've 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 are to know where your cards are at all times and to
keep them secure. For ATM card protection, it's important to keep your
Personal Identification Number (PIN) a secret. Don't use your address,
birthday, phone or social security number. Memorize the number. Statistics
show that in one-third of ATM card frauds, cardholders wrote their PINS
on their ATM cards or on slips of paper kept with their cards.
The following suggestions
may help you protect your credit and ATM card accounts.
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 postcard.
- Draw a line through
blank spaces on charge slips above the total so the amount cannot be
changed.
- Don't sign a blank
charge slip.
- Tear up carbons
and save your receipts to check against your monthly billing statements.
- Open billing statements
promptly and compare them with your receipts. Report mistakes or discrepancies
as soon as possible to the special address listed on your statement
for "billing inquiries." Under the FCBA, the card issuer must
investigate billing errors reported to them within 60 days of the date
your statement was mailed to you.
- Keep a record —
in a safe place separate from your cards — of your account numbers,
expiration dates, and the telephone numbers of each card issuer so you
can report a loss quickly.
- Carry only those
cards that you anticipate you'll need.
For ATM cards:
- Don't carry your
PIN in your wallet or purse or write it on your ATM card.
- Never write your
PIN on the outside of a deposit slip, an envelope, or on a postcard.
- Take your ATM receipt
after completing a transaction.
- Reconcile all ATM
receipts with bank statements as soon as possible.
Buying
a Registration Service
For an annual fee
of $10 to $35, companies will notify the issuers of your credit and ATM
accounts if your card is lost or stolen. This service allows you to make
only one phone call to report all card losses rather than calling individual
issuers. Most services also will request replacement cards on your behalf.
Purchasing a card
registration service may be convenient, but it's not required. The FCBA
and the EFTA give you the right to contact your card issuers directly
in the event of a loss or suspected unauthorized use.
If you decide to buy
a registration service, compare offers. Carefully read the contract to
determine the company's obligations and your liability. For example, will
the company reimburse you if it fails to notify card issuers promptly
once you've called in the loss to the service? If not, you could be liable
for unauthorized charges.
For More
Information
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 Banks
Consumer Affairs Program
Office of Thrift Supervision
1700 G St., N.W.
Washington, D.C. 20552
Other Credit Card
Issuers
(includes retail/gasoline companies)
Consumer Response Center
Federal Trade Commission
Washington, D.C. 20580
Reproduced
with permission from The Federal Trade Commission.
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