Tip of the Week: Keep Your Credit Cards Safe (10/26/98)

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	Keep Your Credit Cards Safe Financial Tip of the Week by Deloitte & Touche OnLine October 26, 1998

Here are some simple steps to take if you lose your plastic.

Now that most wallets contain more plastic than leather, it is more important than ever that consumers know how to protect themselves if a card is lost or stolen. While many consumers assume they are free from liability if they report their cards lost or stolen, that's not necessarily the case. What's more, credit cards aren't the only assets consumers have to be protect. Telephone calling cards, debit cards, ATM cards, stored-value and gasoline cards all represent potential liabilities if they fall into the wrong person's hands.

Safeguarding cards, "is trickier than you would think," said Jean Ann Fox, director of consumer protection for the Consumer Federation of America.

Although different issuers apply different standards, most won't charge consumers for a lost credit, ATM or calling card if they report the loss before the thief has a chance to use it. If charges or withdrawals are rung up before that time, however, consumers may be out as much as $50 per card. That amount can be much higher in the case of dual-use cards (ATM cards that serve as debit cards) if the holder doesn't discover the loss quickly. If a thief begins racking up charges, most will charge $50 if the loss is reported within two business days and $500 if it is reported within two months. If the loss isn't reported within 60 days of a bank statement being mailed, a consumer has no recourse. In other words, thieves can drain their bank accounts and even ring up overdraft charges and the bank will not reimburse them, Fox said.

To protect themselves, consumers should:

Be aware that thieves don't need the actual cards -- only the information on them -- to ring up hefty charges. Never give their card numbers to a representative of a business they are unfamiliar with.
Check monthly statements to ensure they recognize all the charges and notify the issuer immediately if there is a discrepancy.
Tear up mail solicitations offering new credit cards as well as account statements. Such precautions prevent a thief from stealing a consumer's identity and applying for a card in his or her name.
Keep a copy of credit card numbers and the issuers' emergency contact numbers in a safe place (not their wallets or purses) so they can get on the phone quickly in the event their cards are lost.
Check homeowners or renters insurance policies to see if there is a provision covering their liability for lost cards.

Fast action is essential in the event of a loss. As soon as consumers realize a card is missing or suspect someone is misusing a credit or debit card number, they should get on the horn and start canceling.