Where are your credit card and debit card numbers?

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Monday, March 24th, 2008

Going to the grocery store can hold more dangers than rotten meat or tainted spinach – the Associated Press reports that thieves stole 4.2 million payment card numbers from an East Coast supermarket chain.

About 1,800 of those numbers already are being fraudulently used. Some troubling elements of this story: the theft apparently went on for three months, and the card numbers appear to have been swiped from the ether while they were in transit for authorization. It looks like this was a well-planned job.

It’s not clear yet how many of the thefts were credit or debit card numbers, but either means a headache if they land in thieves’ hands.

So how can we protect ourselves when the merchants can’t or won’t stop thieves from stealing our card information?

If you got cash, think about paying with it. Except for very large purchases, cash doesn’t create a number trail that can be stolen. Cash poses no risk of bank overdraft fees from a debit card purchase, and cash payments don’t expose you to sky-high credit card interest rates.

If you pay by debit card, read all your bank statements carefully. A small unauthorized charge – usually under a couple of bucks – can be a crook’s way of testing the account. If you don’t notice, that unauthorized chargeit might be followed the next month by a larger one. If your funds are scammed this way, you have a right to get the charge returned to your account within ten business days after you report the problem. This important step – called theright of recredit – must be taken within 60 days after the statement is made available to you. You have to report sooner if your card (rather than just the card number ) was stolen.

Pay by credit card if you aren’t carrying a balance. Make sure you read your statement carefully. You can dispute unauthorized charges without paying them first, and you can’t be required to pay interest on that portion of the bill while the dispute is under investigation. If you are carrying a credit card balance, this consumer protection comes at the steep price of interest payments from the time of the charge.

Go to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre04.shtm to learn more about your debit card and credit card dispute rights.

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