Protecting yourself from credit card hackers
By Lucy Lazarony, Julie Bandy and Bruce Gillespie • Bankrate.com

You shred your credit card statements and carefully store your receipts, but you may not be the only one who knows your account information.

Visa, MasterCard and American Express confirmed in February 2003 that a hacker or hackers bypassed security systems at a US payment processor to access credit card account information. As many as 8 million Canadian and US accounts -- or more than 15 percent of all Visa and MasterCards in Canada -- may have been compromised.

Although issuers say no related fraudulent activity has been reported, it is a worrying example of how credit card fraud has grown since 1990. According to the Canadian Bankers Association, total dollar losses associated with credit card fraud at the end of 2001, the year for which the most recent data is available, was $142 million, down slightly from $156 million at the end of 2000.

What does this mean for card customers?
Laws differ across the country, but generally your liability is limited to $50. Luckily, most card companies will tell you that fee is rarely applied. Thanks to Visa, MasterCard and American Express's zero-liability policies, you won't pay a penny for a thief's fraudulent shopping spree.

The card associations have offered zero-liability protection for fraud victims for several years now, for purchases made online or in person.

What to do
For card holders, the price of credit is eternal vigilance. Monitor your account statements closely. If you come across a bogus charge, contact your bank or credit card company immediately. Most banks offer provisional credit for losses from unauthorized charges within 24 to 48 hours.

It's a good idea to follow up that call with a letter confirming the facts of the phantom charges on your statement and the details of your call, including who you spoke to and when. Be sure to keep a copy for your records.

Keep close tabs on all future credit card bills. Scan each bill carefully. For more frequent credit card checks, hop online or call your card's toll-free customer-service number.

The sooner you spot a fraudulent charge, the sooner your bank can clear it from your account.

For more tips on keeping your credit card information safe, check out the Financial Consumer Agency of Canada.

A thief who has your credit card information can do more than simply go on a shopping spree: The information can be used to steal your identity. Monitor your credit report to make sure no one is usurping your good financial name.

Bruce Gillespie is a freelance writer and editor in Simcoe, Ontario.