Understanding credit card liability and how one victim of identity theft caught the thief herself: Internet Scambusters #283
Today we have two Snippets for you:
- Credit Card Liability: What's in Your Wallet?
- To Catch an ID Thief, One Victim Did It Herself
The first Snippet explains what you need to know about your liability if your credit card, debit card or ATM card is stolen or lost. Understanding what you need to do -- and when -- is important.
The second story is truly outrageous, and shows (among other things) why new laws are needed to deal with identity thieves.
Time to get going...
Credit Card Liability: What's in Your Wallet?
Most of you know that if your credit card is ever lost or stolen, you're only liable for up to $50 in fraudulent charges.
But did you also know that you could be liable for LESS money, under certain circumstances?
And did you know that this liability law does NOT apply to debit cards?
According to the Federal Trade Commission, The Fair Credit Billing Act guarantees that... "your maximum liability under federal law for unauthorized use of your credit card is $50."
But, if you report the loss of your credit card BEFORE fraudulent charges are made, you cannot be held responsible for ANY of those charges -- in other words, you owe nothing.
Here's another fact most people don't know: "Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use."
Plus, if you're a good customer, your credit card company will often waive the $50 liability.
That's the good news. Now here's the bad news. If your DEBIT card is lost or stolen, your liability is just $50, but ONLY if you report the loss/theft within two days after you realize your card is missing.
And, if you neglect to notify your bank that your debit card has "gone missing" within 60 days after your bank statement containing the unauthorized use is mailed to you, you could lose EVERYTHING in your checking and overdraft accounts.
Also, even if you're not ultimately responsible for the debit card losses, if the theft results in your checking account being emptied out and that causes your checks to bounce, you may still be liable for the fees.
To protect yourself against fraudulent charges on your debit card, contact your financial institution to learn about their liability policies. A few debit card issuers offer better protection than the federal government.
For example, some debit card issuers offer consumers "zero liability" in cases of fraud, theft or unauthorized usage, as long as the cardholder reports the problem within two business days after discovery.
And, if it takes longer than two days, these cardholders are only liable for a maximum of $50 in charges.
To paraphrase a popular TV commercial, it pays to know "what's in your wallet."
To Catch an ID Thief, One Victim Did It Herself
The following true story is about how an identity thief named Maria Nelson stole the identity of Karen Lodrick of San Francisco -- and then was apprehended by Karen Lodrick.
Important: We do NOT recommend trying to catch an identity thief yourself -- in the unlikely event that you ever spot one.
Here's what happened...
In November 2006, Maria Nelson obtained a master key to the mailboxes in Karen Lodrick's building, and stole several letters. One bank statement included Karen's Social Security number, and another letter contained the PIN numbers for Karen's credit/debit cards.
(NOTE: It's common for identity thieves to acquire personal and financial information by stealing victims' mail. It's uncommon, however, for thieves to obtain mailbox keys.)
Although Karen's bank informed her of suspicious activity on her account, it then gave her the runaround, making her come in three times over the course of several months to review photos of Nelson using her debit cards at their ATMs.
Each time Karen reviewed photos, she dealt with different bank employees -- all of whom denied that she'd ever scanned the security photos before.
About six months after the theft, Karen was waiting in a Starbucks when she saw something she recognized -- the coat of the woman she'd seen in all of those bank security photos. Ironically, Karen was in the coffee shop waiting for her bank branch to open.
The branch had called Karen the previous day to inform her that she'd left her driver's license there (in reality, a clever forgery most likely left by Nelson), and apparently, she and the identity thief were both preparing to retrieve it.
Upon recognizing Nelson, Karen took matters into her own hands. After calling 911 to let them know what was happening, she followed Nelson all over town.
Karen's hot pursuit eventually unnerved Nelson enough that she hailed a cab, but Karen talked the cabbie into refusing to give Nelson a ride. Karen tried to get Nelson to stay with her until police arrived, but Nelson said she couldn't -- she was already on probation!
The chase continued, and at one point Nelson tossed away a wallet. When Karen retrieved it, she found it was full of credit cards, debit cards and a Social Security card -- all in her name.
The chase finally ended after 45 minutes in a dark parking garage. Still on the phone with the 911 operator, Karen asked for police backup. When he arrived, the officer found Nelson crouching behind a car, smoking a cigarette.
Nelson evenually "pleaded guilty to one felony count of using another person's identification fraudulently," reports SFGate.com, and was sentenced to the 44 days she'd already served in county jail and three years' probation.
"Nelson also was ordered to make restitution in an amount to be determined by the court and to stay away from Lodrick.
"Lodrick, who made a statement at sentencing, was dissatisfied. 'I can't believe it,' she said. 'I went through six months of hell, and she's going to get probation? She was on probation when she victimized me. Obviously, probation's not helping.'"
You can read the entire story at The San Francisco Chronicle.
Conclusion: We're sharing this story with you because it illustrates many different points, including how difficult it can be to work with banks and other financial institutions if your identity is ever stolen, and how new laws are desperately needed to deal with identity thieves.
To find out more about preventing, recognizing and recovering from identity theft, visit the Scambusters Identity Theft Information Center.
That's a wrap for this issue. Wishing you a great week!