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The 2nd day of credit: Fraud

By Janna Herron · Bankrate.com
Monday, December 23, 2013
Posted: 3 pm ET

So, I'm sure you all have heard about that Target card breach. The retailer said last week that 40 million credit card and debit card accounts had been compromised in a breach that started the day before Thanksgiving and ended Dec. 15.

While a major hack like this is bad news, it is a much-needed reminder why every American should keep watch on the transactions they are getting billed for on their cards. It's especially important during the holidays when cards are being used in high volume and shoppers are distracted.

Fraud can be caught faster now that most transactions are posted online almost in real time. So don't wait for your monthly statement to come in before double-checking every purchase. Make it a habit once a week or once every two weeks.

Credit card fraud

Don't be a victim of credit card fraud during the holidays.

So what do you do if you find a suspicious purchase? Call your bank immediately and report the card compromised. The bank will likely shut down that card and issue a new one. Also, call the credit reporting bureaus -- Experian, Equifax and TransUnion -- and place a fraud alert on your credit report. This lets lenders know that they need to be overly cautious when confirming your identity before issuing new credit in your name.

When it comes to lost money, the good news is that liability for credit card holders is limited. If your actual card is stolen, your maximum out-of-pocket loss is $50. If you report the card stolen before any unauthorized transactions go through, then your liability is zero. If only your card information is stolen -- such as in Target's breach -- your liability is also zero.

The same cannot be said for debit cards, which have fewer consumer protections against fraud loss. If you report your debit card missing within two business days, the maximum that you're responsible for is $50. After that, it's up to $500, a sizable sum. If you don't report it within 60 days of your bank statement showing an unauthorized transaction, you could lose everything in the account and any overdraft lines of credit. This applies to stolen debit cards and debit card information.

So, keep tabs on your plastic for the last two days of holiday shopping. At best, a stolen card can be a nuisance. At worst, it can be an empty bank account.

Has your card been stolen or hacked during the holidays?

Follow me on Twitter: @JannaHerron.

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