Federal law states that victims of credit card fraud can in some cases only sue credit-reporting agencies within two years of the credit card fraud being committed. Credit card fraud, if uncontested, can prevent you from receiving home and car loans due to damaged credit.
Credit card fraud is at times complicated to contest, but the benefits are well worth the time and effort spent fighting the guilty parties.
Stolen cards
When a credit card is lost or stolen, it remains usable until the holder notifies the issuer that the card is lost. Most issuers have free 24-hour telephone numbers to encourage prompt reporting. Still, it is possible for a thief to make unauthorized purchases on a card until it is canceled. Without other security measures, a thief could potentially purchase thousands of dollars in merchandise or services before the cardholder or the card issuer realize that the card is in the wrong hands.
The only common security measure on all cards is a signature panel, but signatures are relatively easy to forge. Some merchants will demand to see a picture ID, such as a driver’s license, to verify the identity of the purchaser, and some credit cards include the holder’s picture on the card itself. However, the card holder has a right to refuse to show additional verification, and asking for such verification is usually a violation of the merchant’s agreement with the credit card companies. Self-serve payment systems (gas stations, kiosks, etc.) are common targets for stolen cards, as there is no way to verify the card holder’s identity.
Cardholder liability
In the US, federal law limits the liability of card holders to $50 in the event of theft of the actual credit card, regardless of the amount charged on the card, if reported within 60 days of receiving the statement.[13] In practice many issuers will waive this small payment and simply remove the fraudulent charges from the customer’s account if the customer signs an affidavit confirming that the charges are indeed fraudulent. If the physical card is not lost or stolen, but rather just the credit card account number itself is stolen, then Federal Law guarantees card holders have zero liability to the credit card issuer.
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