The Problem
A criminal who gets your credit or debit card number can rack up big charges.
Scare Factor
If your credit card number is used fraudulently, you will have to get a new card with a new number, but at least the criminals aren’t spending your money. Legally, you’re responsible for no more than $50 in liability for credit card fraud, but all of the major payment networks (American Express, Discover, MasterCard and Visa) promise zero liability.
How to Combat: Stolen Social Security Number | Medical ID Theft | Tax Identity Fraud | Lost/Stolen Electronics
Armed with your debit card or bank account information, however, a thief could drain your checking account. Theft of debit card data at ATMs, which often involves criminals attaching devices to the machines to “skim” card data, has reached the highest level in 20 years, says FICO, developer of the most commonly used credit score among lenders. As the U.S. payment system transitions to microchip technology, crooks will have a harder time intercepting usable data from payment transactions because the information in chip transactions is repeatedly re-encrypted. As a result, fraud will likely shift to an easier target: use of card numbers to make fraudulent purchases online.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How to Avoid It
Arrange with your credit card issuers and bank to receive e-mail or text-message alerts when there are transactions higher than a certain amount—say, $100—or your account balances reach a certain minimum amount. Check your accounts at least weekly to look for suspicious transactions. Watch especially for amounts of $10 or less; crooks often test the authenticity of card numbers by first making small purchases. When you swipe your debit or credit card at an ATM or gas pump, look for an attachment to the card reader, and shield your hand as you enter the PIN in case there’s a hidden camera. Use a bank ATM whenever possible, says Levin.
What to Do If You’re a Victim:
Call your card issuer or bank as soon as you see suspicious activity on your account. With your bank account, as long as you give prompt notification, you likely won’t be responsible for covering the charges, but you may have to wait until the bank processes your claim to get a refund. By law, your debit card liability could be unlimited if you wait more than 60 days from the date of the fraudulent activity to report it. But many banks have policies to protect debit card customers.
How to Combat: Stolen Social Security Number | Medical ID Theft | Tax Identity Fraud | Lost/Stolen Electronics
-
Ask the Editor — Tax Questions on What Congress Will Do NextAsk the Editor In this week's Ask the Editor Q&A, we answer questions from readers on what Congress will do next with taxes.
-
When Tech is Too MuchOur Kiplinger Retirement Report editor, David Crook, sounds off on the everyday annoyances of technology.
-
Seven Things You Should Do Now if You Think Your Identity Was StolenIf you suspect your identity was stolen, there are several steps you can take to protect yourself, but make sure you take action fast.
-
The 8 Financial Documents You Should Always ShredIdentity Theft The financial documents piling up at home put you at risk of fraud. Learn the eight types of financial documents you should always shred to protect yourself.
-
How to Guard Against the New Generation of Fraud and Identity TheftIdentity Theft Fraud and identity theft are getting more sophisticated and harder to spot. Stay ahead of the scammers with our advice.
-
12 Ways to Protect Yourself From Fraud and ScamsIdentity Theft Think you can spot the telltale signs of frauds and scams? Follow these 12 tips to stay safe from evolving threats and prevent others from falling victim.
-
Watch Out for These Travel Scams This SummerIdentity Theft These travel scams are easy to fall for and could wreck your summer. Take a moment to read up on the warning signs and simple ways to protect yourself.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
How to Guard Against Identity Theft in 2025Scammers are getting better at impersonating legitimate businesses.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
