Friday, November 2, 2007

Limit your Loss

Summarized from

With the holiday shopping season around the corner, Americans will not only stack up gifts, but rack up credit card purchases. As spending increases, so does the likelihood of falling victim to identity theft or fraud schemes.

Each payment method—including credit or debit cards, cash, checks or electronic payments—carries varying consumer protections and potential out-of-pocket costs in the event of theft or fraud.

The Privacy Rights Clearinghouse, a nonprofit consumer information and advocacy organization, offers these tips for safe shopping, and in the event of fraud, how to recoup your losses:

▸ Take home receipts. Save them or shred later instead of throwing them in a store’s trash (they may have your account number printed on them).

▸ Avoid suspicious-looking ATMs and card readers. They can be scams. Counterfeit cards can be made by “skimming” checkout-lane card readers, where account data from cards’ magnetic strips are secretly copied.

▸ For online purchases, use credit cards. Especially when dealing with unfamiliar or auction sites, they may offer better legal remedies against unauthorized purchases and billing errors than debit cards, which present direct access to your checking accounts.

▸ Report fraudulent charges immediately. The Fair Credit Billing Act limits your loss on credit cards to $50, but you must notify the card company within 60 days. For debit cards and electronic transfers, however, your liability remains $50 but must be reported to your financial institution within two business days.

▸ Write checks only to people you know. They include both your account number and bank routing number, making your account easily accessible to fraudsters.