Thieves don’t need much time to do a lot of damage. A woman whose wallet was stolen earlier in August while grocery shopping in Nashville learned this firsthand: Between the time she entered the store with her wallet and when she got to the cash register without it, someone had spent $18,000 on her credit card, reports News Channel 5 in Nashville.
Jennifer Puryear called American Express as soon as she noticed her wallet wasn’t in her purse, but by then, the company told her the card had been used a dozen times at local Target stores. Based on surveillance camera footage, police say the alleged thieves appear to be a couple who tried to use the card at a third Target, but Puryear had already canceled the card. The alleged culprits were buying prepaid debit cards and gift cards—it’s a common tactic, because credit card fraud can be shut down quickly, as it was in this case, and that gives thieves time to spend the money or sell the cards for cash later.
Consumer protection laws concerning credit card theft generally exempt victims from financial liability for the fraud, as long as the theft is reported quickly. The most credit card fraud victims can be responsible for is $50 of the unauthorized purchases, but it’s a different story with debit cards. Even if you don’t end up responsible for anything, debit card fraud can be much more problematic than credit card fraud, because it can take time for the bank to replace the stolen funds. It’s one of the advantages credit instead have over debit cards. If you don’t have a credit card and are searching for one, you can use this expert guide to credit cards to figure out what kind of card might suit you best.
Puryear’s experience is a good example of why consumers may want to consider setting up transactional monitoring on their financial accounts, no matter what kind of card you have. Banks offer different options, but generally, you can update your account settings to receive alerts when a “suspicious” transaction or a purchase over a certain amount clears your account—you might be able to get alerts for any transaction, so if anything occurs that you didn’t authorize, you’ll know immediately. Given how quickly fraud can get out of control, it’s not an unreasonable thing to do.
The worst-case scenario is something like this goes on for long enough that the fraud ends up hurting your credit (or in the case of a debit card, draining your bank account). If the transactions go unnoticed until the time your credit card balance is reported to the credit bureaus, your credit score could suffer from the seemingly high credit card balances. Because it’s fraud, you should eventually be able to correct the problem, but that’s something you’ll want to avoid having to deal with in the first place. In the event that you don’t catch the fraud on your financial statements, make it a habit to check your credit, so you’ll at least spot the fraud there. You can get two free credit scores every 30 days on Credit.com, which will help you see suspicious changes in your scores and allow you to track down (and correct) problems as soon as possible.