First things first. That $50 figure only applies to fraudulent credit card usage. It does not apply to debit card use, or other fraudulent access to bank/checking accounts.
Second: Yes, Federal law limits your liability for unauthorized charges made on your credit card after it has been lost or stolen. But only if you report the loss within a “reasonable time.” That time is usually 30 days. We don’t know about you, but 30 days goes by in a flash for us sometimes. Are you willing to take the risk?
If you are, just beware that you could be liable for the entire amount stolen from your bank accounts directly or through debit card usage if you don’t catch the fraudulent activity early on.
Uh oh. So what’s my real risk, then?
Well, that all varies on a case-by-case basis. But identity theft victims do suffer real damages, according to the FTC:
- An average of 175 to 200 hours (5 full work weeks) spent repairing damage done to their credit rating.
- An average of $1,100 in out-of-pocket expenses for repairing their credit rating.
- Loss of creditworthiness and access to financial services, telecommunications and utility services, and even employment.
- Loss of wages to collection agencies and garnishments.
- Loss of tax refunds withheld due to bad debts or other penalties.
- Loss of driving privileges or other licenses, some professional.
- Potential for being arrested and detained.
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