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Protecting yourself from credit card hackers

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

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Unfortunately, hackers are getting bolder with each passing day. In February 2003, Visa, MasterCard, Discover and American Express acknowledged that a hacker or hackers bypassed security systems to access credit card account information. As many as 8 million accounts, more than 1 percent of all the cards in the United States, may have been compromised.

What does this mean for affected card customers?

Federal law limits your liability to $50, but most card companies will tell you that while it can cost you that $50, the fee is rarely applied. Thanks to Visa and MasterCard's zero-liability policy, you won't pay a penny for a thief's fraudulent shopping spree.

The card associations have been offering zero-liability protection for fraud victims since spring 2000. American Express has had an online fraud protection guarantee since 1998 and rarely charges for unauthorized purchases made offline. Discover guarantees zero liability for fraudulent online purchases.

What to do
For cardholders, 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.

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.


-- Posted: July 12, 2004




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