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Lost wallet? Take these four steps now

Dear Steve,
My wallet was just stolen and there is enough information in it for someone to open credit cards in my name. Is there a way I can prevent any lines of credit from being opened in my name? Say, for the next 60 or 90 days? Any advice would be appreciated. Thanks in advance. -- Colleen

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Dear Colleen,
Make sure what happened to you is not what happened to me (actually it was my wife's doing). Recently she lost her wallet, which had one of my credit cards in it! I was ready to call the card issuer, the FBI and my mother. But my sweetie said, "Just wait a little and see if it turns up." Well, some people have all the luck, and the bank called the next day to say she had left it on the teller counter and could she come get it.

So in this case, a short wait turned out to be the right thing to do. Dirty Harry said it best: "You've got to ask yourself one question: 'Do I feel lucky?' Well, do ya?"

If you don't, then here's what you need to do:

Cancel lost credit, ATM and debit cards. Information regarding what to do if your credit card is lost or stolen is provided when the card is issued. Sometimes this information is included in your billing statement as well. Usually a toll-free telephone number is provided that you can call 24 hours a day to report the loss. Some good news for you is that once you have reported the loss you are protected under federal law and will only be liable for a maximum of $50 per card on any unauthorized charges. Your homeowners insurance may cover any loss; however, you still should watch your billing statements carefully. If any unauthorized charges show up on your statement, let the issuer know.

ATM and debit cards are different and can cost more. Your liability for unauthorized use of them depends on how fast you notify the issuer of the card's loss. Report a lost card within two days of discovering it is missing and your liability is limited to a maximum of $50; after two business days and within 60 days from the date your statement is mailed, you could get hit for up to $500 per card. If you don't report the loss within 60 days of the day you received the statement containing the first unauthorized use, you are on your own. All losses, including any line of credit associated with the cards, become your responsibility. Ouch! It is a good idea to only carry the cards that you will be using and keep the others in a safe place until needed.

Your main concern was about identity theft. Here's what to do about that:

Report the theft to credit bureaus. Contact one of the three credit reporting agencies. The good news here is that each agency is bound by law to report your loss to the other two and a fraud alert will be placed on all three reports. The initial alert stays on your credit report for 90 days. You may choose to put an extended alert on your report, which will remain for seven years. If, as you say, there is enough information in your wallet to open credit accounts, better to go for the extended alert. There is no way to keep your thief from filing your information away for future use.

File a police report. This is very important if your identity is indeed stolen by an unscrupulous individual. A copy of the report will make it easier to prove that future credit card charges do not belong to you and you are not liable. Contact your local police department and they will take it from there.

Provide details to the FTC. The Federal Trade Commission keeps a database of identity theft cases, which once reported, may help other people avoid identity theft. The agency pursues only large-scale cases, but every report helps them monitor the problem nationwide and take appropriate action. And it can help you, too. Once you fill out the ID Theft Affidavit at the FTC's Web site, you can use it to make copies and send to creditors in the case that unauthorized credit lines are opened.

Colleen, I sincerely hope your wallet is the only thing that was stolen and not your identity.

Good luck!

The Debt Adviser, Steve Bucci, is the president of Money Management International Financial Education Foundation. Visit MMI for additional debt advice or click here to ask a debt question.

Bankrate.com's corrections policy
-- Posted: June 4, 2005
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