What is my liability for identity theft?
Around the holidays it seems that identity theft becomes more common. I often get the question, “Do I have to pay for fraudulent charges made by someone who has stolen my identity?” If you act in time, your liability is minimal; however, the steps you need to take are different depending on whether the fraud occurred on a credit card or an ATM card.
The Federal Truth in Lending Act established laws that provide help for victims of credit card fraud; but there is a time limit to receive identity theft assistance. The Truth in Lending Act typically limits your liability for unauthorized credit card charges to $50 per card – but you must take action within 60 days. If you have identity theft claims for fraudulent charges on your credit card account you must use the following procedures set up by the Fair Credit Billing Act for resolving disputes and billing errors, which includes fraudulent charges on your accounts.
1) Put it in writing. Review your statements to find a mailing address for “billing inquires.” Write a concise, clear letter to each creditor and include your name, address, account number and details of the fraudulent charges shown on the statement, including the date and amount of the unauthorized charges.
2) Beat the 60-day deadline. You MUST mail your notification letter so that it reaches the creditor within 60 days of the date of the first bill containing the fraudulent charge was mailed to you. The sooner you send it, the better. If an identity thief changes the address on your account so you never receive the statement, it does not excuse you from the 60-day notification requirement. You are responsible to keep track of your billing statements and immediately follow up with creditors when your bills do not arrive on time.
3) Get proof of receipt. Send your letter using certified mail with a return receipt requested so you have confirmation of delivery with the date the creditor received the letter. Make copies of sales receipts or other documents that support your position and enclose them with your letter. Keep the original receipts and a copy of your dispute letter.
The Federal Electronic Fund Transfer Act also generally limits liability to $50 for loss due to fraudulent transactions made using electronic funds transfers and/or ATM cards. Like credit card fraud, your report of unauthorized transactions must be in writing, and be delivered to your banking institution within 60 days of the mailing date of the bank statement you received reflecting the unauthorized withdrawals.
However, consumer protection against liability differs dramatically for ATM transactions involving a lost or stolen card. Specifically, if you report the loss or theft of your ATM or debit card before any unauthorized charges are made, you will not be responsible for any unauthorized withdrawals from your account. If you report the ATM card stolen within two business days and fraudulent charges are made, your liability is limited to $50. If you report your card stolen after two days, but within 60 days of the unauthorized withdrawals appearing on your statement, you could lose up to $500 of the unauthorized withdrawal amount. If you wait to report the loss on a stolen or missing card beyond 60 days, you may be liable for all unauthorized withdrawals made after the end of the 60 day time restriction.