zero fraud liability With the seemingly never-ending headlines of data breaches worldwide, people are becoming more and more aware of just how easy hackers can obtain their personal information, including their credit card numbers. Whether someone physically steals your credit card, a hacked POS system or ATM skimmer tracks your card number or you’ve given out your payment information to a phone scammer, there is a high chance that your credit card number will be leaked. Fortunately, $0 fraud liability is there to protect you in the event that your credit card is stolen and unauthorized charges are made on it. We break down what $0 fraud liability is, which credit card issuers offer this type of protection and what you can do if you suspect fraudulent activity on your credit card.

Federal laws provide some protection

You may have seen $0 fraud liability on our credit card reviews or a credit card’s terms and conditions and wondered what that means. Before we explain that, we’ll have to detail how federal fraud liability works.

As you may or may not know, the Fair Credit Billing Act and the Electronic Fund Transfer Act offer legal protection from unauthorized charges on your debit and credit cards, but there are some stipulations and limitations that come with them, especially for debit card users. These federal laws, as detailed by the FTC, limit your liability to $50 in fraudulent charges for credit cards if you report the card lost or stolen after fraudulent charges appear. If you report the card lost or stolen before fraudulent charges appear, you are not responsible for any of the charges. Additionally, if your credit card number is stolen, like in a data breach, you are not liable for any unauthorized use of the number.

The $50 liability also holds true for debit cards, but you must report it within two business days after the loss or theft. If you wait and report it anywhere from two business days to 60 calendar days after your statement is sent to you, you are then liable for up to $500. And if you wait past the 60-day mark, your bank may hold you liable for all charges, even if they weren’t made or authorized by you.

$0 fraud liability picks up the slack

Now that you understand how federal fraud liability works, we can dig into $0 fraud liability. To provide credit cards holders with more security if their card is lost or stolen, credit card providers, including Chase, MasterCard, Capital One, Citi, Bank of America, Wells Fargo, American Express, Barclaycard and Discover, offer $0 fraud liability policies. This means that you will not be responsible for any unauthorized charges made on your account (remember federal law requires you to pay $50 if you report the loss or theft after the card is fraudulently used, so you’re off the hook for that), regardless of whether your credit card was lost or stolen or simply used without your permission.

Some issuers, like Visa and MasterCard, extend this same protection to debit cards, as well, while many of the other policy issuers restrict ATM and PIN transactions from being covered under the $0 liability policy. Because each debit card’s $0 fraud liability policy is worded a little differently, it’s important that you read the full terms and conditions for your card so you know exactly how you’re protected. If you still have questions or want more information, call the number on the back of your debit card to talk to a customer service representative.

How can I protect myself from credit card fraud?

There are no surefire ways to prevent credit card fraud, but there are a handful of things you can do to help protect your accounts.

1. Check your statements. First and foremost, you should always monitor your billing statements regularly to see if anything seems fishy or out of the ordinary. Some credit card providers and banks even allow you to receive text or email alerts on your spending, which can give you a heads up in the event that someone is making unauthorized charges on your credit card. Keeping tabs on your statements will help you not only get an understanding of your spending, but also allow you to spot fraudulent charges as soon as they appear.

2. Beware of scammers. Next, Be sure to never give your personal information out over the phone, be it your social security number, mailing address or credit card number, unless you picked up the phone and dialed the number for a legitimate bank or business yourself, as there are plenty of phone scammers out there pretending to be someone they’re not just to steal your money or identity.

3. Destroy old cards. Remember to cross-shred or destroy any expired or invalid credit or debit cards that you have laying around the house. There’s no reason to keep them if they no longer work, and you don’t want to just throw them in garbage for anyone to see. Even if you have a new card number, it’s still a wise idea to destroy the old one, as you can reveal which bank you use in addition to how your name appears on your credit or debit card, making it a little easier for thieves to connect the dots.

4. Consider identity theft protection. As an added layer of protection, you may want to consider signing up for an identity theft protection service. While these services do not help you monitor the activity on your statements or accounts, they can alert you if your personal or financial information is being sold or traded on the Internet black market, a tell-tale sign your information was breached, and they offer a handful of other helpful features like credit report monitoring and public records searches. Visit our identity theft protection reviews to learn more about how one of these services can help you.

If you become a victim of credit card fraud, you’ll want to notify your bank or card issuer right away. It’s also a good idea to avoid paying the fraudulent charges on your credit card statement until it’s resolved, as paying could be seen as acceptance, even if you didn’t authorize the charges in question. Similarly, if you notice fraudulent transactions on your bank account, you’ll want to follow the steps detailed in this blog post.

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