The Myth of Credit Card Loss Protection Offers

Phone fraudsters are targeting potential victims with a frightening sales pitch about how new laws no longer protect consumers against unauthorized charges, often resulting from identity theft. They say their “credit card loss protection” insurance—available for a fee, of course—will protect you in these instances. 

You may want to think twice when you’re targeted with this sales pitch, and definitely don't buy the "loss protection" insurance. These solicitors are not revealing the entire truth to increase the odds of selling people their often worthless credit card loss protection and insurance programs. What can be so worthless about them? For one thing, the law clearly states that if you didn't authorize a charge, you don't pay for it. Simply follow your credit card issuer's procedures for disputing fraudulent charges. According to the Federal Trade Commission, your maximum liability for unauthorized charges is limited to $50.  

The FTC says worthless credit card loss protection offers are popular among hucksters trying to exploit consumers' uncertainty. The agency cautions consumers to avoid doing business with any entity claiming that:

• You're liable for more than $50 in unauthorized credit card charges.
• You need credit card loss protection because computer hackers can access your credit card number and charge thousands of dollars to your account
• A computer bug could make it easy for thieves to place unauthorized charges on your credit card account
• They're from "the security department" and want to activate the protection feature on your credit card.

Never give personal information (including credit card or bank account numbers) when contact has been initiated by the other party. Scam artists can use your personal information to commit fraud, such as identity theft.