AOH :: CCFRAUD.TXT|
Credit and Charge Card Fraud
Facts for Consumers from the Federal Trade Commission
Credit and Charge Card Fraud -- February 1993
The cost of credit and charge card fraud _ to card holders and to
card companies alike _ was $864 million in 1992. Everyone pays
for credit and charge card fraud in higher prices, whether or not
they are personally defrauded.
While theft is the most obvious form of credit and charge card
fraud, fraud occurs in other ways, as well. For example, someone
may use your card number (not the card itself) without your
permission. This may occur in a variety of ways:
l A thief rifles through trash to find discarded receipts or
carbons to use the card numbers illegally.
l A dishonest clerk makes an extra imprint from your credit
card or charge card for his or her personal use.
l You receive a postcard or a letter asking you to call an
out-of-state number to take advantage of a free trip or a
bargain-priced travel package. When you call, you are told you
must join the travel club first. You are asked for your credit
card number so you can be billed for the membership fee. The
catch? New charges continue to be added at every step and you
never get your free or bargain-priced vacation.
How to Guard Against Credit and Charge Card Fraud
Here are some suggested precautions you can take to help protect
yourself against credit and charge card fraud. You also may want
to instruct any other person who is authorized to use your
account to take the same precautions.
l Sign your new cards as soon as they arrive.
l Carry your cards separately from your wallet. Keep a record
of your card numbers, their expiration dates, and the phone
number and address of each company in a secure place.
l Keep your card in view, whenever you can, after you give it
to a clerk. Retrieve your card promptly after using it.
l Avoid signing a blank receipt, whenever possible. Draw a
line through blank spaces above the total when you sign card
l Void or destroy all carbons and incorrect receipts.
l Save your card receipts to compare with your billing
l Open billing statements promptly and reconcile your card
accounts each month, just as you would your checking account.
l Report promptly and in writing any questionable charges to
the card issuer.
l Notify card companies in advance of a change in address.
In addition, here are some things you should not do:
l Never lend your card(s) to anyone.
l Never leave your cards or receipts lying around.
l Never put your card number on a postcard or on the outside
of an envelope.
l Never give your number over the phone unless you are
initiating a transaction with a company you know is reputable. If
you have questions about a company, check with your local
consumer protection office or Better Business Bureau before
What To Do If Your Cards Are Lost or Stolen
If your credit or charge cards are lost or stolen, call the
issuer(s) immediately. Most card companies have a toll-free
number for reporting missing cards. Some companies provide
24-hour service. By law, once you report the loss or theft, you
have no further liability for unauthorized charges. In any event,
your maximum liability under federal law is $50 per card.
What To Do About Suspected Fraud
If you suspect that someone has illegally used your credit card,
call the card issuer immediately. Use the special telephone
number that many card issuers list on their billing statements.
You also may want to follow up your phone call with a letter.
You may be asked to sign a statement under oath that you did not
make the purchase(s) in question, but you cannot be required to
For more information about your credit rights, write to: Public
Reference, Federal Trade Commission, Washington, D.C. 20580 for
these free publications: Credit Billing Errors; Fair Credit
Billing; Lost or Stolen: Credit and ATM Cards; and Telemarketing
Travel Fraud. You also can write to this address for a free copy
of Best Sellers, which lists all the FTC's consumer and business
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