Whether you’re traveling with your family on holiday or are out for shopping on the weekend, the use of plastic money has grown phenomenally with the increasing number of digital consumers. It relieves one of the risks of carrying excess cash and also saves from the embarrassment of a shortage of money in times of need or urgency. However, with the growing use of plastic money, the concerns around its misuse have also risen. Cards, whether lost or stolen by fraudsters, can lead to significant losses if one doesn’t stay cautious and takes the necessary step for restricting the damage arising out of the loss.
It is imperative for one to report about the loss of the debit card, ATM card or credit card to the card issuer within a stipulated time frame. That will save one from the liability of unauthorized transfers. Note below the steps to be taken in the event of theft or loss:
- The first step is to call the card issuer as soon as you realize about the incident. Most of the card issuers have 24 hours helpline numbers or customer care phone lines to inform about such emergencies. Emergency contact can be found online or in the card statement. The loss can also be registered on the website or at the bank’s branch. Note that the sooner you report it, the lesser would be your liability of any unauthorized payments, transfers or purchases.
- After reporting the loss, follow it up with an e-mail or letter. Mention details such as your name, card number, when did the card go missing, when you first reported about the loss, etc. Keep a record of the mails sent date-wise.
- It is essential to check the card statement in details and report about the transactions that you have not authorized. Do the required formalities for billing errors.
- Many insurance companies offer Insurance policies for fraud coverage for lost or stolen card. It is highly recommended that you get insurance coverage for protection against unexpected losses. Although the maximum loss that one might have to bear is US$ 50 if reported within a reasonable time frame. The key in such cases is to act as quick as one can.
The extent of Liability in the event of fraud or loss
Depending upon when you report about the loss, the charges or liability varies. In case of loss of credit card, the maximum liability can be US$ 50. However, if you inform the bank about the loss before the card is used, then you will not have to bear any liability for any unauthorized transactions. In case of theft of only the credit card number, and not the card, there is no liability.
In case of ATM or Debit cards, if you report before there is a misuse of the card, then you are not responsible for any unauthorized use of the card. However, if you file the report after someone uses your card, your liability would vary depending on how quickly you act. If you report within two business days of learning about the event, you may have to bear US$ 50. If the report is filed after two business days but within 60 calendar days after receiving the statement, then a maximum loss can be US$ 500. In case you don’t report within the 60 calendar days of receiving the statement, you will have to bear the entire amount equal to the money withdrawn through ATM card or debit card.
What can trigger doubts about unusual card activity?
Generally, all card issuing agencies have proper measures in place to get hold of any unusual activities as soon as they occur. Say in case of purchases that are not characteristic of the cardholder, or several small purchases which often hint that hackers are testing the card before a major transfer is about to take place, or if transfers happen outside your geographic regions. In such cases, the agencies act promptly and may decline transactions. The account remains suspended until the cardholder confirms the transaction.
Phishing is a widespread threat. You might receive emails or text messages asking you to respond with your personal information or directing you to some fake website which requests sensitive information. Unless authenticated, one must not share any card details on any platform.
Skimming is another threat wherein your card information is duplicated to make a copy. That can mostly happen in case your card is accessible to other people such as waiters at restaurants. Sometimes card readers can also get installed at ATMs or gas pumps. In case of cards which have a chip inserted that generates unique one-time-passwords every time a transaction takes place, skimming gets challenging to pull off.
Tips to protect card information
- Do not disclose your card details over a phone call.
- Do not leave your card information unguarded.
- Do not carry the passwords, PINs and other confidential information related to the account in wallet or pocket.
- Note all the crucial details of your card such as important dates and keep it safe.
- Do not sign a blank paper
- Do not dispose of old cards without cutting them.
- Always draw a line above the total amount and draw a line through blank space.
- Do not write your PIN anywhere.
- Do have a thorough check of your account’s activity. In case of any discrepancy between your records and account statements, report immediately.
- Do check your transactions with utmost care.
Insurance coverage for lost or stolen cards
Generally, the amount of liability to be borne in the event of fraudulent transfers or lost cards is limited to US$ 50. However, certain insurance covers such as Homeowners Insurance policy and Rentals Insurance policy cover unauthorized charges related to the cards. The limit of coverage is very low. In the case of Homeowners insurance, the limit is US$ 500, and in the case of Rental insurance, the typical claim limit is US$ 1000.
It is always important to be on the toes and have a presence of mind that can detect fraud not only in case of debit or credit cards but any circumstances. Protecting your money with smart financial planning is always a good idea.