Saturday, January 19, 2008
Thinking Ahead Can Save You Time And Money
Early in December, I logged onto my business checking account to verify my current balance, before paying some bills. The low balance surprised me, so I began to review the recent transactions â" and to my surprise, found four cash withdrawals from an ATM in St. Petersburg Russia! Perpetrators had made a duplicate of my checkcard and used it (with my pin, presumably) to withdraw hundreds of dollars. Bank of America returned the funds into my account that evening, pending its investigation, so I was able to pay my bills. But, if I had not checked my account, it could have been emptied (and I may have bounced checks) without my knowledge. Are You Liable for Fraudulent Transactions? You may be aware that under Federal law, you are only liable for the first $50 of fraudulent credit card transactions. Visa, MasterCard, and American Express have adopted zero liability company policies, reducing that liability to $0 in most circumstances. However, this protection does not necessarily apply to checkcard, or ATM card, transactions. Checkcards, usually linked to a checking or savings account, may be used as a credit card, usually under Visa or MasterCard, or as a PIN-based Debit or ATM card. The credit card transactions are governed by the $50-limit credit card rule. Debit and ATM transactions, however, are governed by another set of liability rules. What Are Your Rights Regarding CheckCard or ATM Card Fraud? If you report a debit or ATM card missing before any fraudulent transactions occur, then you are not responsible for any future fraudulent transactions. If the unauthorized transactions occur before you realize your card is missing (or if you still have your card), then the amount for which you are responsible depends upon how quickly you report the fraudulent transactions and/or missing card: Report loss of card within two business days from when you realize the card is missing = $50 limit Report within 60 days after your statement is mailed to you = up to $500 Report after 60 days = unlimited loss (all the money in your account, as well as your maximum line of credit for overdrafts) There are exceptions to these limits, such as for extended travel or illness. Also, many banks and credit unions have reduced these limits under their terms of service contracts, or ignore the limits in particular circumstances. What Can You Do To Limit Debit / ATM / Check Card Fraud? Do not write down your PIN or security codes Be wary of email phishing (impersonating bank websites) Shred mail Monitor your main accounts regularly during the month Close old, rarely used accounts (but be aware of possible effects on credit rating) Monitor credit reports annually (at least) Maintain list of credit and check card numbers, expiration dates, and telephone numbers of issuers in safe location Review account statements, including accounts you rarely use In case of loss, report immediately Elizabeth Potts Weinstein, JD , a licensed attorney and Registered Investment Advisor, is the founder of Potts Weinstein Financial Consulting, a financial and estate planning firm, headquartered in San Jose, California. The firm specializes in providing fee-only, hourly financial planning, estate planning, and investment advice for people from all walks of life and income brackets. Visit pottsweinstein.com for more information or to subscribe to her monthly ezine Prosper! .