Credit Card Fraud – Victims Rights and Options

Three credit cards locked together on computer keyboardFinancial fraud is widespread and feared by most of the public. One of the most gut-wrenching feelings is opening a credit card statement and seeing huge payments for items you didn’t order. With the proliferation of the internet across the world, especially poorer countries like China, the number of hacking attempts against personal information and credit cards continues to increase. It is now easier than ever to steal someone’s information and use it to purchase something while remaining completely anonymous. But there are various tools you can use to protect yourself should you find yourself the victim of one of these attacks.

Your Rights Under the Fair Credit Billing Act

The Fair Credit Billing Act is your first line of defense. The Federal government limits your liability for credit card fraud to $50 a transaction. If your credit card has already been stolen, your liability is zero. There are also no time limits for reporting fraud under this law. The Fair Credit Billing Act covers all credit cards, so if you feel your credit card company isn’t following through on this law, make sure to remind them of it. There are other older laws protecting against fraudulent withdrawals or debit card fraud. But the Fair Credit Billing Act is considered the most robust, making credit cards the most protected against fraud.

Credit Card Networks offer Additional Protection

On top of government protection, various credit card networks such as Visa and MasterCard have built in fraud protection. Under most circumstances, Visa and MasterCard will not hold you liable for fraudulent purchases. Some credit card networks vary on the time period you’re allowed to report fraudulent purchases, but most are around two billing cycles. Passing this time frame is considered “gross negligence”, as most people would have noticed odd purchases within two billing cycles.

Why You Should Report Fraud as Soon as Possible

There are various benefits to reporting credit card fraud early. Immediately after you report the fraud, your credit card company will freeze your account so no new fraudulent purchases can be made. Additionally, your credit card company cannot charge interest or fees on the fraudulent charge while its being investigated. If the charge is considered fraudulent, your company will issue you a new card immediately.

Filing a Complaint with Consumer Financial Protection Bureau

When the options above fail, there is still one more route to take. The Consumer Financial Protection Bureau (CFPB) allows Americans to submit a complaint against fraudulent charges. If your credit card company doesn’t help you out, this is the next step. Before filing a complaint, collect as much evidence for your claim as possible. Once your complaint has been received, the CFPB will forward your complaint to the relevant company. That company has 15 days to respond. According to the CFPB, all but the most complicated complaints are closed within 60 days. The CFPB will also forward your information to any relevant state and federal agencies. The benefit of using the CFPB is that your credit card company is likely to take your complaint much more seriously once the Federal government becomes involved.

Final Thoughts

Although the Fair Credit Billing Act allows fraudulent claims at any time with no limit, it is a much healthier practice to report the fraud as early as possible. Remember to check up on your credit cards and online payment history on a regular schedule to ensure nothing fishy is going on. Most financial companies now have text or mobile notifications whenever a purchase is made. Also remember to never share your passwords with anyone, especially not over email. Finally, remember to use strong passwords on all of your sensitive online accounts.

Posted on January 16, 2018 by in Credit Cards

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