What to do if you’re a victim of credit card fraud

Man looking out of his window and talking on the phoneImage: Man looking out of his window and talking on the phone

In a Nutshell

If you’re a victim of credit card fraud, it’s important to monitor and report any suspicious activity. We’ve outlined the steps you need to take to protect yourself and your money.
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Nobody wants to find out they’ve become a victim of credit card fraud, and finding suspicious purchases on your card can be worrisome.

While some people may never experience credit card fraud, it happens every day. You may find yourself wondering how and where somebody compromised your card. Was it that gas station in the middle of nowhere? Maybe that online store you bought some clothes from? The truth is, it can be hard to tell.

In 2015, global credit, debit and prepaid card fraud amounted to $21.84 billion in losses, according to the Nilson Report. By 2020, the same report estimates that card fraud worldwide will reach a whopping $31.67 billion.

Your credit card information may be stored by retailers, and data networks of many retailers can be breached. So even if you haven’t used your card in months, it can be compromised, which is why it’s important to monitor your financial accounts regularly.

All of this may sound scary, but there is some good news. In most cases, credit card companies have safeguards designed to help protect you and your purchases from credit card fraud.

Perhaps the most prominent of these safeguards is the EMV chip — that small silver- or gold-colored chip embedded on the face of most new credit cards. Small but mighty, this chip’s processing method makes your transactions more secure and may help to reduce credit card fraud.

“Most card [networks] have moved to chip cards,” says John Ulzheimer, credit card expert and president of the Ulzheimer Group. The data backs him up. According to Visa’s chip card update published in March 2017, there are 421.1 million Visa® chip cards in the U.S. alone, a 164% increase over the previous year.

Unfortunately, EMV chips haven’t completely solved the problem of credit card fraud. So, what if you find yourself looking at charges on your card that you definitely didn’t make?

Don’t panic. Instead, take a deep breath and start getting a game plan together. We’ve rounded up important tips on what to do next.

5 steps to take if you’re a victim of credit card fraud

  1. Call your credit card company immediately
  2. Check your credit card accounts and change your passwords
  3. Notify the credit bureaus and call the police if necessary
  4. Monitor your statements and credit reports
  5. Check your online shopping accounts
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1. Call your credit card company immediately

First and foremost, it’s important to get ahead of the criminals using your card before they can inflict more damage.

Major card networks like Visa and Mastercard have “zero liability” policies designed to ensure that you won’t be held responsible for unauthorized charges made with your credit or debit card or account information. The same goes for credit card issuers like Citi, which promises $0 liability for unauthorized charges on all its cards.

Even if your credit card info is compromised and your credit card company doesn’t have a zero liability policy in place, your liability for credit card fraud is limited to $50 under the Fair Credit Billing Act.

Still, it pays to be vigilant. As soon as you notice charges you don’t recognize, call your credit card company. They’ll likely issue you a new card with a new card number and investigate the charges immediately.

2. Check your credit card accounts and change your passwords

Your best bet is to exercise caution. After you call your credit card company, make sure you check all of your other credit card accounts to see if they’ve also been compromised.

It’s important to note that, even though only one card may have suspicious charges, you can’t be sure how the fraudster got the information. So make sure you change all of your passwords and PINs just to be safe.

3. Notify the credit bureaus and call the police if necessary

Filing a police report is especially crucial if you see a pattern of fraudulent charges in the days following the first signs of suspicious activity. Sometimes credit card fraud can happen all at once, and other times it might be days or weeks apart.

If you notice multiple credit cards or financial accounts being used without your knowledge, contact the major credit bureaus to alert them and request a credit freeze. This can help stop criminals from doing further damage, like opening up a new credit card.

After you’ve done that, call the police and file a report. If you notice a pattern of credit card fraud, the police can use your records to open an investigation.

Remember: Serious identity theft could lead to more than a simple case of credit card fraud. For example, if someone steals your wallet, the thief could potentially use your credit, insurance and identification cards to open utility and credit accounts in your name.

Identity theft should also be reported to the Federal Trade Commission. It can assist you in developing a “recovery plan” to prevent further loss and get things squared away with the police and credit bureaus as necessary.

4. Monitor your statements and credit reports

After the first signs of credit card fraud, you’ll want to keep monitoring your credit card statements for a few months. Fraudulent charges can keep appearing on your card statements months after your card information is stolen if there was any additional information, such as login credentials, that may have been compromised.

Credit Karma can also help when it comes to staying on top of your credit reports. You can sign up for free and get access to your credit reports from two of the major credit bureaus, TransUnion and Equifax. Your reports can be updated as often as once a week, and you can check them for free anytime. Credit Karma offers free credit monitoring in addition to free VantageScore 3.0 credit scores and reports from two of the three major credit bureaus.

“Consumers should also become much more engaged with the transactions occurring on their credit cards,” says Ulzheimer. “Many card issuers offer free text alerts every time your card is used.”

5. Check your online shopping accounts

Nowadays, it’s fairly common for online shopping websites to let you save your card information for future purchases. Even if you’re protected by your credit card company’s “zero liability policy,” it’s important to make sure your online shopping accounts haven’t been compromised.

Remove the compromised card (as well as any other stored cards) in case your online shopping account is no longer secure, and change those passwords as well.

Bottom line

While anybody can be a victim of credit card fraud, nobody has to have their life or even day ruined because of it. These tips can help you stay on top of all your credit card activity, which is a great weapon to tackle credit card fraud.

As we continue to use credit cards more and more, credit card fraud will surely continue. The important thing to remember is that you’re not alone in this fight. You can rest easier knowing there are plenty of tools to help you if you’re ever a victim. Of course, you can also help yourself by keeping your accounts secure with strong passwords and regular monitoring.

About the author: Brian Spychalski is a former Credit Karma freelance contributor now based in San Francisco. He has a background in corporate finance and a deep knowledge of the consumer credit market. When he’s not working, Brian can… Read more.