Fraud Victim? Here's What You Need to Know

It's always better to be proactive than it is to be reactive, and your financial situation is no different. Fraudulent use of credit cards is increasing, but there are a number of precautions you can take to minimize your risk of fraud - and some things you can do if you've already become the victim of fraud.

Debit Cards Don't Protect You Like Credit Cards

Most credit cards have zero liability for cardholders for unauthorized charges.Debit cards do not follow these same rules or regulations.If someone gets hold of your debit card and makes purchases, you are simply out of that money and there is no protection offered to you from the card issuer. Knowing this information, you can keep a closer watch on your debit card and make sure it's with you at all times, or tucked away safely at home.

Credit card Limited Liability

If your credit card is used to make unauthorized purchases, your liability for that spending is low. Many cards offer a zero-liability protection, while others may hold you responsible for up to $50 of whatever the unauthorized purchases were. Make sure you report your card lost or stolen as soon as you know, as that will increase your liability protection. Federal law states that you have no liability if your account number is stolen rather than the card itself – so if you have the card in your possession but notice unauthorized purchases on your statement, you can fill out an affidavit (court lingo for written letter) from the issuer that confirms the fraud. Always report everything as soon as you see it happening.

New Account Fraud

Sometimes criminals are able to open accounts using your personal information.You must file a police report if this happens to you and then contact the credit bureaus to have the information removed from your credit report.This will typically require the police report to prove it is criminal activity.

Keep Good Records

Whenever you are dealing with identity fraud and anything to do with credit cards, it's necessary to keep impeccable records. Even something as simple as using balance transfer credit cards should be recorded carefully in case there are any problems that arise after everything is said and done. Having good records for your financial activities bolsters your case should you need help dealing with fraud and correcting your credit history.

If for some reason you can't remove fraud charges from your accounts, you can write them off as a tax deduction. Check with your accountant or tax preparer for details and you will need to have good documents and records to take advantage of this as well.

Becoming a victim of fraud will insist that you use all resources available to you to repair the financial damages that have been created.It is a time consuming process. You can prevent much of it by using a credit and fraud protection plan - while there are fees associated with such plans, the amount is usually negligible compared to the amount of time it will take to repair your credit if you become a victim.