Here's What to Do Immediately After a Credit Card Breach

By Dan Rafter. Last updated 1 February 2016. 0 comments


The new EMV credit cards (better known as "chip" or "chip and pin" cards) are supposed to significantly cut down on credit card fraud. But these new cards, embedded with computer chips, are far from foolproof. Most security experts say that criminals will now focus on online transactions, stealing consumers' information as they enter it into websites.

"If it gets too difficult to steal credit card information from transactions at the register, criminals will increasingly move online," said Tom Donlea, e-commerce director for Whitepages."The new EMV cards offer no protection to consumers who are shopping online."

So, what should you do if your financial records are exposed in a credit card breach? Here are five steps you should take immediately after you discover that your credit card information has been compromised.

1. Close the Compromised Account

Once you discover that thieves have stolen your credit card information, immediately call your provider to close that account. This will stop thieves from using your card to make any additional fraudulent purchases.

2. Dispute Any Fraudulent Purchases

The federal Truth in Lending Act protects you from credit card purchases made without your permission. According to federal law, your credit card provider can only charge you a total of $50 for unauthorized purchases made with your card, no matter how many of these purchases thieves run up.

There's no time limit on when you must report these disputed charges, either. If thieves are using your debit card, though, you do have to act quickly. To be eligible for the Truth in Lending Act's personal liability limit of $50, you must report your card lost, stolen, or breached within two business days.

Once you call your card provider to report a fraudulent purchase, the financial institution will send you a document to fill out stating that you believe that the charges are fraudulent. Don't worry about having to argue with your provider. They will usually take your word. And most won't even charge you that $50 to which they are entitled.

3. Check Your Credit Card Statements Carefully

Study not only your current credit card statement, but past ones, too, for suspicious charges. You don't know how long thieves have been using your credit card to make unauthorized purchases. Check older statements for purchases that you don't remember making or that look unusual.

You should be studying your statements carefully every month, of course. Being vigilant for suspicious purchases on your account is the best way to stop fraudulent activity quickly.

4. Alert the Three Credit Bureaus

Next, contact the three national credit bureaus — TransUnion, Experian, and Equifax — to inform them that your credit card information was compromised. The bureaus will then place a 90-day fraud alert on your credit reports. (See also: Should You Always Dispute Mistakes on Your Credit Report?)

This fraud alert will protect you against future unauthorized charges. That's because with the alert in place, creditors will take extra steps to make sure anyone opening an account in your name is actually you and not a fraudster.

5. Educate Yourself

You might never discover how thieves were able to gain access to your card information. But you can take steps to prevent future problems.

Because so many criminals are turning to online fraud today, learn how to protect yourself when using the Internet. Don't open suspicious email messages, and never click on links when an email supposedly from your bank asks you to verify your information. These are usually scam emails.

Only buy items online from trusted, legitimate retailers. And never use your credit card at a site that doesn't ask you to provide the three-digit security code that is usually printed on the back of your card. Sites that don't ask for this information aren't doing enough to protect you.

There's little that you can do to protect yourself from a wide-scale data breach, such as those suffered in recent years by major retailers. But you can protect yourself from those scammers who target individual consumers. It just takes a bit of commonsense on your part.

Have you ever had one of your credit accounts hacked? How did you respond?

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