6 Ways to Protect Yourself From Fraud

Fraud happens. Here's how to protect yourself from credit breaches

by Laura Sinberg
how to protect yourself from fraud image
Photograph: Anastasia Vasilakis

The number of notified credit-breach victims who later endured fraud increased 340 percent from 2010 to 2012; up to 110 million people were affected by last year’s Target breach alone. No one can relax: The FBI has warned that we can expect more cyberattacks in the coming months. Victim or not, take these steps now to keep your money safe.

Don’t shop with your debit card
Federal law capsyour liability for fraudulent credit card charges at $50. Your liability with debit cards is also $50, but only if you report the charge within two business days. After that, it’s $500. If you wait longer than 60 days after the statement was sent, you could lose all the money stolen from your account—and it can take months for a breach to come to light.

Sign for your transactions
If you use a debit card, your money may be safer if you sign for your purchase rather than enter your PIN. Visa and MasterCard offer “zero liability” policies on debit transactions for customers who go this route.

Unlink your accounts
Do you have a savings account linked to your debit card? That money will be at risk, too, if your card and PIN are compromised.

Check your credit card and bank statements online
Aim for three times per billing cycle, says Linda Sherry, director of national priorities at theadvocacy group Consumer Action, to avoid missing your window to report a fraudulent charge. If your card has been compromised, havinga new card issued with a new PIN is usually sufficient, says Eva Velasquez, president and CEO of the Identity Theft Resource Center.

Change your pin
Annually switching it is a best practice—even if your card hasn’t been compromised.

Monitor (or freeze) your credit report
You’re entitled to three free reports a year; order one every four months from AnnualCreditReport.com. Some companies that have experienced breaches—like Target—offer a year of free credit monitoring. Take it.

To be proactive, or if you know your Social Security number has been stolen,Velasquez recommends a “security freeze,” which takes your credit files out of circulation so no lender can access your report to open a line of credit.

Next: 9 Beliefs About Money That Can Hold You Back

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First Published Thu, 2014-04-10 11:05

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