There are usually several steps in reporting credit card fraud. In general, they are all intended to alert the appropriate organizations and authorities to the fraud to begin an investigation. While it can be time consuming and disruptive to one’s finances to report credit card fraud, it can often help ensure that further fraud, such as the opening of unauthorized accounts, does not occur.
In general, credit card fraud is when a thief steals another person’s credit card information and uses is it without permission. Thieves often get this information by stealing actual credit cards from wallets and purses. They may also get it by stealing cards sent through the mail, hacking into online data transfers that contain credit card information or setting up credit card scams that lure people into handing over private information. People often first recognize the theft after unauthorized charges begin appearing on monthly credit card statements, or if credit card issuers contact them about suspicious charges.
No matter how it happens, the first step to report credit card fraud is usually the same in most countries. For example, in the United States, Canada and the United Kingdom, people who suspect fraud are usually advised to first contact the bank or company that issued the credit card. In the U.S. and Canada, as soon as a person reports suspected fraud, he or she typically becomes liable for no more than $50 of the unauthorized charges made up to that point. Contacting the card issuer to report credit card fraud also usually ensures the compromised account will be shut down and the person will be liable for no further charges made.
The next step to report credit card fraud usually involves contacting local law enforcement to report the crime. In the U.K., credit card companies are responsible for initiating this contact. Individuals must often do this in the U.S. and Canada, however. Depending on the nature of the crime, local authorities may also recommend reporting the crime to national organizations, such as the Federal Trade Commission in the U.S. or PhoneBusters in Canada.
After law enforcement has been notified, it is generally recommended that people call the national credit reporting agencies, the organizations responsible for maintaining credit reports. Fraudulent charges can often have a damaging effect on a person’s credit report, as charges may exceed credit limits and payments may not be made on time, but notifying the credit reporting agencies may help mitigate this.
For example, in the U.S., a person can contact one of the three main credit reporting agencies to have a “fraud alert” put on a personal credit report. The agency will forward this request to the other two agencies so any time credit is applied for in that person’s name, the agency that receives the credit inquiry will be prompted to contact the person and verify the legitimacy of the inquiry. This can help reduce the likelihood of identity theft, which typically involves the opening unauthorized financial accounts.
When people report credit card fraud to the credit reporting agencies, they can also usually request that a freeze be put on certain accounts, such as those that have been used without permission. A freeze generally keeps those who run credit report inquiries, such as banks and other credit card companies, from seeing the activity on the frozen accounts. In the case of an account that was stolen and used improperly, this can help limit the damage the fraud has on a person’s credit worthiness in the eyes of future lenders.
Experts generally recommend that any time steps are taken to report credit card fraud, a written record of what occurred should be saved. This can include, for example, the date contact was made, who the report was made to and any advice received. If local law enforcement is notified directly, it should also usually include a copy of the police report. This documentation can be helpful in case future fraud occurs or in case any records need to be disputed.