How I Became a Victim of Credit Card Theft.
Posted on | March 24, 2008 |
Some people get careless with their personal information. Some people shop online at websites that are less than reputable. This isn’t me. That’s part of the reason I was surprised to log into my credit card account website to access my statement and see:
Account Alert : Your account has been closed, because it was reported lost or stolen. Please register your new account number now to access Account Online.
How did it happen, you ask? I shopped at Hannaford.
Hannaford is a regional grocery store, here in the North Eastern United States. My wife and I shop there for the grocery items that are not on sale at any of the other stores. They have pretty good selections and prices on most things, but not many sales. My wife routinely saves about $40 a week by splitting up the purchases… but that’s a topic for a different post.
Over the past week or so, Hannaford has announced that its computer system has been “compromised” and 4.2 million customer credit and debit card numbers have been stolen. Jeeesh! It’s bad enough I’ve got to watch my back when I’m shopping at stores I don’t know online, but now I have to watch my friendly neighborhood grocery chain too!
To be realistic, there’s not much I can do to prevent this sort of thing in the future. The best thing I can do is to pay with cash or credit and avoid using a debit card whenever possible.
This seems to contradict what a lot of people think about using credit and staying out of debt. In fact the conventional “debt-free” thinking is to cut up your credit cards and only use debit cards. I think this is sound advice for people who have a hard time controlling their spending. But for people who can pay off the balance every month, then a Credit card is safer. In the event that your card gets stolen, your liability is far greater with a debit card. If a thief gets hold of your debit card number, then they have complete and total access to your bank account.
True, you won’t technically be liable for the purchases a thief makes on your stolen card, but you’ll have a painful process to endure while you sort it all out with your bank and you could even rack up mountains of overdraft fees.
With a credit card though, you have the luxury of not having to pay for any disputed charges - and you can only be held accountable for up to $50 if you report your card in a timely fashion:
“Credit Card Loss or Fraudulent Charges (FCBA). Your maximum liability under federal law for unauthorized use of your credit card is $50. If you report the loss before your credit 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 is $50 per card. Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.”
That’s from the Federal Trade Commission website.
Here’s what they say regarding ATM or Debit cards:
“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 use. However, if you don’t report the loss within two business days after you discover the loss, you could lose up to $500 because of an unauthorized transfer. You also risk unlimited loss if you fail to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use is mailed to you. That means you could lose all the money in your bank account and the unused portion of your line of credit established for overdrafts. However, for unauthorized transfers involving only your debit card number (not the loss of the card), you are liable only for transfers that occur after 60 days following the mailing of your bank statement containing the unauthorized use and before you report the loss.”
So, you can see that the credit card offers a greater level of protection from unauthorized purchases. Just make sure you pay off the balance every month!
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