What If My Credit Card or Debit Card Information Has Been Compromised?
Breaches of customer information through major retailers like Target, Sears, Forever 21, or Whole Foods have been huge stories in the news media in recent years.
But credit card information is breached and stolen on a regular basis. Usually, we do not hear about it because it is not as large of a breach. If you have ever received a letter from your bank that your debit card or credit card needs to be replaced because information has been compromised, then it’s happened to you.
Generally, the bank is informed by the business with the breach. The bank then determines whether or not to issue you a new card. But you also take steps to protect yourself in the event this ever happens to you. Take these 5 steps to protect your accounts and monitor it for identity theft, plus learn where to avoid using your credit card to avoid having your information stolen.
Use Your Card Wisely
One of the most important things you can do is to only use your card on trusted sites. This does not guarantee that something will not happen, but it does lower your risk.
Before you enter your card information, always be sure that the site is secure. Although this has become second nature for many people, it is still something you should do on a regular basis. (You can tell if a site is secure if it starts with https instead of http.)
If you are not sure about a site, take the time to read reviews to make sure there are no issues. Additionally, you should be on the lookout for skimmers that are put into ATMs or other places you use your card, which are used to illegally collect your card information. If something doesn't look right at an ATM, don't use it.
Monitor Your Accounts
Banks and credit card companies give you a window to report fraudulent activity on your account. If you do not report it within the time frame, then you become responsible for the charge. Most have a window of 24 hours after a fraudulent charge is made.
However, you can dispute individual charges after they appear on your statement for a set period of time, usually at least a month. But be sure to check your bank’s policy to know the time period for your accounts.
By monitoring the transactions on your cards daily or weekly, you can catch fraudulent activity more quickly and call the bank to stop unauthorized charges. You should be balancing your account to every statement at the very least. Some banks will let you see pending charges when you monitor your account. these can be stopped before they go through.
Check Your Credit Report
Sometimes hackers will use the information they have stolen to steal your identity. This means that the fraudulent activity will not show up on your current accounts. Instead, they will open new accounts under your name.
If you monitor your credit report regularly, you can catch this activity. You are allowed to pull a credit report from each of the three agencies each year for free. If you space these every four months, you can monitor your credit throughout the year.
If you find fraudulent accounts, you can put a freeze on your credit report, which means the banks have to contact you directly before opening an account. It also alerts them that you have been the victim of identity theft.
Report Fraudulent Activity
When you find credit card activity that is not you, either with an account or your credit report, you need to dispute the item. You will need to contact the bank involved and tell them there has been fraudulent activity.
Then you will need to file a police report. The bank may require a copy of this report to reverse the charges or to close down the fraudulent account. This can be a time-consuming and extensive process, and you need to be prepared to follow through. Same goes with your credit report. If there is an error on your credit report, you need to contact both the report and the credit agencies to have the changes made to your report.
If you plan to buy a house in the next year, you need to be on top of your credit report to make sure that nothing like this happens, since these issues can take months to clear up.
Where to Avoid Using Your Credit Card
You can do your part to avoid compromising your credit card information by thinking before you swipe.
For example, while you may be tempted to use that outdoor ATM when you're in a pinch and need cash, stick to bank-owned ATMs, or even better, ATMs are your bank. Here's why: You'll avoid ATM fees, plus those outdoor ATMs are more likely to be hacked. Some aren't even ATMs, but skimmer devices intended solely to steal your information. Also avoid using your credit card at gas stations, for the same reasons.
You should also avoid online shopping while using public WiFi or public computers. No matter how much you want to make a purchase right that second, you're setting yourself up to get hacked with this one. Other places to avoid: flea markets, smaller shops, temporary shops, and small businesses. Try to pay cash instead.
Sign Up for Credit Monitoring Services
Many credit card companies will offer credit monitoring services. Some insurance agencies will offer something similar or identity theft insurance. This can be expensive, and you want to make sure you clearly understand exactly what you are paying for before you sign up.
But it can be helpful to have someone on your side who will help you sort through the mess if your identity is stolen, or prevent it from happening altogether. Many people will sign up for this after they deal with identity theft, but getting it before that happens will save you the hassle of dealing with identity theft or fraudulent charges in the first place.
Updated by Rachel Morgan Cautero.