Increasingly, people find it convenient to shop with credit cards
or to bank at automated teller machines (ATMs) with ATM cards.
But the ease with which these cards can be used also makes them
very attractive to thieves.
Loss or theft of credit and ATM cards is a serious consumer
problem. However, two federal laws, the Fair Credit Billing Act
(FCBA) and the Electronic Fund Transfer Act (EFTA), establish
procedures for you and your creditors to follow to resolve
problems with credit cards and electronic fund transfer accounts.
This brochure explains what to do if any of your cards are
missing or stolen, suggests how to protect your cards, and
explains what you can expect from a credit card registration or
Limiting Your Financial Loss
There are at least two good financial reasons for you to report
the loss or theft of your credit and ATM cards quickly. First,
the sooner you report the loss, the more likely you will limit
your liability if someone uses your card without your permission.
Most card fraud occurs within the first 48 hours after a card is
Second, the sooner you report any loss, the more card costs in
general can be kept down. You pay higher interest rates and
annual fees because card fraud costs issuers hundreds of millions
of dollars each year.
If any of your cards are missing or stolen, report the loss as
soon as possible to your card issuers. Some companies have
toll-free or WATS numbers printed on their statements and 24-hour
service to accept such emergency information. For your own
protection, you should follow up your phone calls with a letter
to each card issuer. The letter should give your card number, say
when your card was missing, and mention the date you called in
You may wish to check your homeowner's insurance policy to see if
it covers your liability for card thefts. If not, some insurance
companies will allow you to change your current policy to include
protection for card losses.
l Credit Card Loss. If you report the loss before these cards
are used, the FCBA says the card issuer cannot hold you
responsible for any unauthorized charges. If a thief uses your
cards before you report them missing, the most you will owe for
unauthorized charges on each card is $50. This is true even if a
thief is able to use your credit card at an ATM machine to access
your credit card account.
However, it is not enough simply to report your credit card loss.
After the card loss, review your billing statements carefully. If
your statements show any charges not made by you, send a letter
to the card issuer describing each questionable charge on your
account. Again, tell the card issuer the date your card was lost
or stolen and when you reported it to them. Be sure to send the
letter to the address provided for billing errors. Do not send it
with a payment or to the address where you send your payments
unless you are directed to do so.
l ATM Card Loss. If you report an ATM card missing before it
is used without your permission, the EFTA says the card issuer
cannot hold you responsible for any unauthorized withdrawals. If
unauthorized use occurs before you report it, the amount you can
be held responsible for depends upon how quickly you report the
loss to the card issuer. For example, if you report the loss
within two business days after you realize your card is missing,
you will not be responsible for more than $50 for unauthorized
However, you could lose as much as $500 because of an
unauthorized withdrawal from your bank account if you do not tell
the card issuer within the two business days after you discover
the loss. And, you risk unlimited loss if, within 60 days after
your bank statement is mailed to you, you do not report an
unauthorized transfer or withdrawal. That means you could lose
all the money in your bank account and the unused portion of your
maximum line of credit established for overdrafts.
If any unauthorized transactions appear on your bank statement,
report them to the card issuer as soon as you can. As with a
credit card, once you have reported the loss of your ATM card you
cannot be held liable for additional amounts, even if more
unauthorized transactions are made.
Protecting Your Cards
The best protections against card fraud, of course, are to know
where your cards are at all times and to keep them secure. For
ATM card protection, it is important to keep your Personal
Identification Number (PIN) a secret. Memorize this number.
Statistics show that in one-third of ATM card frauds, cardholders
wrote their PINS on their ATM cards or on slips of paper they
kept with their cards.
The following suggestions may help you protect your credit and
ATM card accounts.
For credit cards:
l Be cautious about disclosing your account number over the
phone unless you know you are dealing with a reputable company.
l Never put your account number on the outside of an envelope
or on a postcard.
l Draw a line through blank spaces on charge slips above the
total so the amount cannot be changed.
l Do not sign a blank charge slip unless absolutely necessary.
l Rip up carbons from the charge slip and save your receipts
to check against your monthly billing statements.
l Open billing statements promptly and compare them with your
receipts. If there are any mistakes or differences, report them
as soon as possible to the special address listed on the billing
statement for "billing inquiries." Under the FCBA, the card
issuer must investigate billing errors if you report them within
60 days of the date your card issuer mailed you the statement.
l Keep in a safe place (away from where you keep your cards) a
record of your card numbers, expiration dates, and the telephone
numbers of each credit-card company for the emergency of
l Carry only those cards that you regularly need, especially
For ATM cards:
l Select a PIN (personal identification number) that is
different from other numbers noted in your wallet, such as your
address, birthdate, phone, or social security number.
l Memorize your PIN.
l Do not write your PIN on your ATM card or carry your PIN in
your wallet or purse.
l Never put your PIN on the outside of a deposit slip, an
envelope, or on a postcard.
l Examine all ATM receipts and bank statements as soon as
Buying a Card Registration Service
Many companies offer card registration and protection services
that will notify all companies where you have credit and ATM card
accounts in case your card is lost or stolen. With this service,
you need make only one phone call to report all card losses
instead of calling each card issuer individually. Also, most
services will request replacement cards on your behalf.
Registration services usually cost $10 to $35 yearly.
Purchasing a card registration may be a convenience to you, but
it is not required by card issuers. The FCBA and the EFTA give
you the right to contact credit card companies and ATM card
issuers directly in the event of loss or suspected unauthorized
If you do decide to buy a registration service, compare offers
and look for one that will best suit your needs. Read the service
contract carefully to check the company's obligations and your
liability. For example, will the company reimburse you if it
fails to notify charge card loss promptly after you report the
loss? If not, you could be liable for unauthorized charges.
For More Information
For additional information about credit or ATM card fraud or
credit card billing problems, send for: Credit and Charge Card
Fraud; Fair Credit Billing; or Credit Billing Blues. These
brochures are available free. Write to: Public Reference,
Federal Trade Commission, Washington, D.C. 20580.
The following federal agencies are responsible for enforcing
federal laws that govern credit and ATM card transactions.
Questions concerning a particular card issuer should be directed
to the enforcement agency responsible for that issuer.
State Member Banks of the Federal Reserve System
Consumer and Community Affairs
Board of Governors of the Federal Reserve System
20th & C Sts., N.W.
Washington, D.C. 20551
Comptroller of the Currency
Mail Stop 7-5
Washington, D.C. 20219
Federal Credit Unions
National Credit Union Administration
1776 G St., N.W.
Washington, D.C. 20456
Non-Member Federally Insured Banks
Office of Consumer Programs
Federal Deposit Insurance Corporation
550 Seventeenth St., N.W.
Washington, D.C. 20429
Federally Insured Savings and Loans, and Federally Chartered
Consumer Affairs Program
Office of Thrift Supervision
1700 G St., N.W.
Washington, D.C. 20552
Other Credit Card Issuers
(includes retail/gasoline companies)
Division of Credit Practices
Bureau of Consumer Protection
Federal Trade Commission
Washington, D.C. 20580