Consumer Beware

Federal Law Limits Consumer Credit Card Fraud Liability

Data breaches from big-name retailers, gas pump skimmers, and common thieves are just a few of the ways your credit card account number can end up in the wrong hands. Once a criminal has your account number or card, they can quickly rack up a huge amount of charges. This kind of scenario can be worrisome, but just how much credit card fraud liability do consumers have? The good news for consumers is federal law limits consumer liability for credit card fraud.

Credit Card Fraud Liability For Physical Card Theft

If a person’s credit card is physically stolen, the consumer’s liability is limited to $50. Some credit card companies actually have a zero liability policy, meaning the consumer wouldn’t even be liable for the $50 allowed by federal law. Check with your credit card company for more details on their fraud liability policy.

Credit Card Fraud Liability For Account Number Theft

If a person’s credit card account number is stolen via security breach, gas pump or ATM skimmer, the consumer is absolved from any liability for fraudulent charges.

Consumer Best Practices

While a consumer’s liability from fraudulent charges is limited under federal law, consumers shouldn’t just ignore the fact that credit card fraud can happen. Consumers should do the following:

• Check Accounts Often: Consumers should check the activity for all their accounts frequently, even if they are not using a specific account. Checking your accounts every few days only takes a few minutes, but can surface any recent fraudulent activity.
• Report Suspicious Activity: Don’t assume you just don’t remember a specific transaction. Dig into it and make sure you can determine if you made the purchase or not. If there’s suspicious activity, report it immediately.
• Report Lost and Stolen Cards: If you have any suspicion your card has been lost or stolen, report it immediately. Once you have reported the card as missing, the card will be deactivated. It also helps to develop a timeline as to when fraudulent charges may have begun, to help your case against having disputed charges be dropped from your account. It’s much better to report a card missing and then find it in the washing machine than to assume you have it when it’s really been stolen.

Federal law limits consumer credit card fraud liability. However, it does depend upon the consumer reporting a missing card, or unauthorized activity. By following the above steps, consumers can stop credit card fraud early, and reduce the headaches that may result from dealing with fraud.

Have you ever been the victim of credit card fraud?