How to Deal With Unathorized Credit Card Debt

A thief might run up unauthorized debt on your credit card.

Criminals have many different ways of getting your credit card information and running up huge unauthorized debts in your name. They use skimming machines to copy your credit's magnetic strip or get your account number by looking in your trash, observing you in stores or tricking you into downloading malicious software. They run up as much unauthorized debt as possible before you notice. Fortunately, the law protects you from paying the charges if you deal with the situation properly.

Instructions

1. Identify the unauthorized credit card debt on your online account or monthly statement. There may only be one fraudulent charge, but thieves usually make as many as possible once they get your number. Make a list of every charge you did not authorize.

2. Call the fraud hotline telephone number on the back of your credit card, the National Consumer Law Center states. Agents will be available 24 hours a day to take reports of unauthorized use. Call the customer service number and select the appropriate menu option if your card does not list a separate fraud number.

3. Tell the agent you are a fraud victim and enumerate all the unauthorized charges. He will close your account and issue another card with a new account number. This prevents further unauthorized use. The company should also remove the charges from your account so you do not have to pay for them.

4. Send a follow-up letter to your bank listing the date and time of your phone conversation and listing the unauthorized credit card charges. You will get a dated receipt if you use certified mail. This is useful if the bank or a collection agency ever tries to collect money from you for the unauthorized debt in the future.

5. Place a fraud alert with all three main credit reporting agencies, the Fight Identity Theft website advises. Experian, Equifax and TransUnion all have instructions on their websites for this process. An alert keeps a criminal from opening more accounts in your name if she managed to steal your entire identity.

6. Request copies of your three credit reports. You are entitled to them at no cost when you are a fraud victim, even if you already ordered your free annual reports through the federally mandated annualcreditreport.com website. Search it carefully for unfamiliar cards, accounts and other debts an identity thief might have incurred. Report them to the banks or lenders immediately.

Tips & Warnings

• The Fair Credit Billing Act limits your liability for unauthorized credit card debt to only $50, the Federal Trade Commission explains. You are not liable for anything if you report a lost or stolen card before it is fraudulently used or if a criminal uses your account number without the actual card.

References

• Federal Trade Commission: Credit, ATM and Debit Cards - What to do if They're Lost or Stolen
• Fight Identity Theft: Fraud Alert
• National Consumer Law Center: Consumer Facts for Older Americans

Resources

• Equifax
• Experian
• TransUnion
• Consumer Action: Questions and Answers About Credit Card Fraud