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The Most Important Thing to Know About Credit Card Breaches

in Savings Tips


Over the last few months, several retailers have announced massive credit and debit card data breaches. Target, Neiman Marcus and Michael’s each announced that hackers were able to break into their networks and steal payment card information. While the extent of the breaches is still unknown, one thing is for certain – several of us will see fraudulent activity on our accounts over the coming months.

There is a silver lining.You are not liable for any fraudulent charges made to your debit or credit card. The rules and regulations that govern how payment cards work clearly state that the cardholder (you) is not responsible for fraudulent charges made to your account. In addition to zero liability guarantees, federal law protects you from more than $50 worth of credit charges that are unauthorized.

But just because you do not have liability for the charge does not mean that fraudsters will not try to use your stolen card number. If you notice a fraudulent charge on your monthly statement, simply call the 800 number on the back of your card or go to your bank’s website to dispute the charge. Once you do so, the disputed amount will be removed from your statement pending an investigation. When the bank verifies that the charge was fraudulent, you will receive a notification that the case has been resolved.

The same process can be followed for fraudulent activity on debit card accounts.

While cardholders are not responsible for fraudulent activity, data breaches do harm credit and debit cardholders. For one, cardholders need to be more thorough than ever in reviewing their monthly statements. Also, the process of disputing a charge can be time consuming. Last, for debit cardholders, the funds may actually come out of your account before you notice the fraudulent activity.

What else can you do to protect yourself from fraudulent credit card activity? If you shopped at one of the stores that reported a payment card data breach, you can proactively call your card company and ask for a replacement card. If you report the card as lost or stolen, you will receive a new card for free. The same zero liability protection will apply.

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