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Indiana Department of Financial Institutions

DFI > Education > Education Information > Credit Information > Credit Cards > Credit Card Loss Protection Offers: Don't Buy The Pitch Credit Card Loss Protection Offers: Don't Buy The Pitch

Don't buy the pitch

"I got a call from a woman who said I need credit card loss protection insurance. I thought there was a law that limited my liability to $50 for unauthorized charges. But she said the law had changed and that now, people are liable for all unauthorized charges on their account. Is that true?" ......NO

Don't buy the pitch—and don't buy the "loss protection" insurance. Telephone scam artists are lying to get people to buy worthless credit card loss protection and insurance programs. If you didn't authorize a charge, don't pay it. Follow your credit card issuer's procedures for disputing charges you haven't authorized. See Credit card billing disputes.

Credit Card Loss

If you report the loss before the cards are used, the Fair Credit Billing Act says the card issuer cannot hold you responsible for any unauthorized charges. If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card. This is true even if a thief uses your credit card at an ATM machine to access your credit card account.

However, it's not enough simply to report your credit card loss. After the loss, review your billing statements carefully. If they show any unauthorized charges, send a letter to the card issuer describing each questionable charge. Again, tell the card issuer the date your card was lost or stolen and when you first reported it to them. Be sure to send the letter to the address provided for billing errors. Do not send it with a payment or to the address where you send your payments unless you are directed to do so.

Worthless Credit Card Loss Protection Offers

The Federal Trade Commission says worthless credit card loss protection offers are becoming more common and fraudulent promoters try to exploit consumers. As a result, the agency is cautioning consumers to avoid doing business with callers who claim that:

  • you are liable for more than $50 in unauthorized charges on your credit card account.
  • you need credit card loss protection because computer hackers can access your credit card number and charge thousands of dollars to your account.
  • they're from "the security department" and want to activate the protection feature on your credit card.

The Federal Trade Commission advises consumers not to give out personal information—including their credit card or bank account numbers—over the phone or online for any product unless they are familiar with the business and have initiated the contact. Scam artists can use your personal information to commit fraud.

Credit Card Loss Protection Offers Brochure

See other Web Sites on Credit Cards.