Life After Theft: How to Recover from Credit Card Fraud

In the Digital Age, some us feel more vulnerable than ever before.

Technology improves our way of life, but it also exposes us to additional risks. If you’ve ever experienced credit card fraud, then you know exactly how technology can be used maliciously.

These scammers and hackers create a variety of schemes to commit credit card fraud. They may initiate a data breach, use skimmers on credit card machines, or call us posing as a trusted entity.

No matter their methods, when it happens to us, we feel violated, angry, and worried about how to properly recover. But before we can even begin to process exactly what happened, we must act. To not act quickly after credit card fraud could make a bad situation even worse.

Read on to learn exactly what to do after credit card fraud to ensure your finances don’t suffer further.

How to Recover from Credit Card Fraud

Credit cards with chips instead of swiping capabilities alone are now reducing credit card fraud. But, credit card fraud still accounts for billions of dollars in losses. Use the following steps to recover from credit card fraud as quickly and efficiently as possible.

1. Collect Yourself

Before you can remedy your financial situation, it’s helpful to first take a deep breathe and collect yourself. Instead of acting from a place of high emotion, take some time to breathe and prepare. While this can be difficult to do, having a clearer mind can help you to more effectively handle the steps required to improve the situation.

To prepare, grab a pen a paper. Having these items will help you to write down important notes, create a checklist, and keep track of names, dates, and other important information. Doing so will help you to also remember vital details during this stressful period.

2. Contact Your Credit Card Company

As soon you as you notice fraudulent transactions, contact your credit card company. Notify them of the fraudulent activity and of the exact transactions you didn’t complete.

If your credit card is also linked to your bank account, then you should notify your financial institution, as well.

A positive side of credit card fraud is that many credit card companies have zero-liability policies that protect you from paying for fraudulent charges. However, there may be a small fee you’ll need to pay depending on when you reported the fraudulent charges.

If you reported your credit card lost or stolen before the charges took place, many credit card companies won’t charge you a fee or hold you responsible for the charges.

If someone does use your card fraudulently before your report it to your credit card company, federal law mandates that the company can only charge you a $50 fee. In this scenario, you also won’t be held accountable for paying off the fraudulent charges.

However, you must report the fraudulent activity within two business days to qualify for this fee rate. After the two business day mark, your liability then jumps up to $500 dollars within 60 days of receiving your credit card statement. If you wait longer than 60 days, however, you could be held entirely accountable for the fraudulent charges.

So, when it comes to reporting fraud, time is of the essence. Make sure to always report fraudulent transactions as soon as you learn of them. Even more vigilant, is to report your credit card lost or stolen before any fraudulent activity occurs.

3. Update Your Accounts

After credit card fraud occurs, it’s important to update your credit card account, bank account, and any other accounts your credit card was linked to such as PayPal. It’s also a good measure of caution to update passwords for any other credit cards or financial accounts.

To start, change your online passwords and PIN numbers. It’s also a good idea to not have the same passwords or PIN numbers for multiple accounts.

Next, you should add alert capabilities to each of your banking and credit card accounts. Alerts will allow you to know exactly when a transaction occurs so you can keep track of all your account activity to prevent further fraud.

4. Contact a Credit Bureau

As soon as possible, contact one of the three credit bureaus to report the fraudulent activity. When you contact one bureau, that bureau is then required to report the fraudulent activity to the other two bureaus.

To start, ask them to put a fraud alert on your credit reports. Fraud alerts can stop fraudsters from opening additional lines of credit in your name. Any credit institutions will also contact you before a new line of credit is opened when a fraud alert is active on your credit report.

If you want additional protection, you can also ask the credit bureau to freeze your report. Even though freezing your account may cost a small fee, it could prevent further fraudulent activity from occurring.

After contacting a credit bureau, you should then report the fraudulent activity to the Federal Trade Commission. They will help you to create a recovery plan and can help with any investigations. This will be especially useful if you decide to file a police report.

Sadly, sometimes credit fraud results in a lowered credit score. If fraudulent behavior results in bad credit, then you should learn more about bad credit and getting loans.

5. Monitor Account Activity

In the months and weeks following credit card fraud, you should make sure to monitor all of your credit and bank accounts. Thoroughly examine each bank and credit statement, and keep up to date with account alerts.

You can also opt into free or paid credit monitoring services from trusted sources.

Credit Card Fraud Prevention

While we can’t always prevent credit card fraud, there are ways to protect your financial status. To protect yourself, monitor all account transactions, change passwords regularly, and don’t use the same password for every account.

While credit card fraud is no doubt a stressful experience, the credit card company, credit bureaus, and the Federal Trade Commission will all do their best to get your finances back on track.

Need to lighten your mood after experiencing credit card fraud? Check out our blog post for 5 great humor websites that could reduce your stress.