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Attention Target Shoppers: You Have Been Hacked!

The ramifications of the second-largest data breach in U.S. retail history are continuing to unfold. When hackers stole data from 40 million cards used at Target, the third largest retailer in the United States, the potential fraudulent activity on so many debit and credit cards led JP Morgan to lower the daily limits on ATM withdrawals and to cap daily store purchases. Although these limits have been eased, they will likely remain in place until it can be determined whether the hackers had compromised encrypted PIN data of customers. Target disclosed that some encrypted data was hacked, and the forensic and criminal investigation is ongoing.

Obviously, the hacking of up to 40 million credit and debit cards at the peak of the holiday shopping season caused more damage than has yet to even be determined. Potentially affected consumers are advised to pay close attention to their credit card statements and debit card transactions for fraudulent activity. It is a good idea to replace the card used while shopping with a new one, and to choose a new PIN for the new card. Having a new card with a new PIN will stop any (more) fraudulent transactions from being processed.

What can you do to protect your account from being hacked in the first place? Some suggest using a credit card rather than a debit card. Debit card fraud has been rising by approximately 30% in the last few years: about 1 in 14 consumers have been hit by debit card fraud in the last 5 years. Debit cards are an even bigger target for thieves because of cash withdrawals, and banks are less likely to freeze debit cards when they notice something suspicious (compared with credit cards) because it is harder to block people from using their own money.

The other reason to avoid debit cards is that they are not protected under the federal Fair Credit Billing Act. With credit cards, you can refuse to pay for products or services that you did not purchase or that are defective. Not so with a debit card. Similarly, federal law limits your liability in case of fraud or error with a credit card to $50 if you notify the card issuer within 60 days after the statement listing the problematic transaction is mailed. With a debit card, the $50 liability limit expires two days after the fraud; after two days your liability increases to $500.

If you still want or need to use a debit card, one way to protect yourself from fraud is to monitor your account daily for suspicious activity. Sign up for text or email alerts for transactions that exceed parameters you set, such as amount and/location, or alerts regarding balance thresholds. One of the reasons that debit cards are so risky is that they are linked directly to your bank account; if the card is hacked, so is your bank account. That is one reason why setting up a secondary account for your debit card is a good idea. Fund the secondary account with only that amount of money you want your debit card to access, and put your other funds--e.g. paycheck, cash--into your primary account. Then if your debit card is ever hacked, your extent of liability is the amount of money in your secondary account. A variant of this option is a prepaid debit card.

Another proactive step is to be part of a fraud monitoring service. LifeLock and other similar threat detection services monitor your card activities and alert you when your account has gotten into the wrong hands. Your Atlanta personal injury lawyer wants you to avoid being the next victim of identity theft. Remember, when it comes to identity theft and fraud protection being proactive rather than reactive is one of the best policies.

Categories: Tips, News, Credit Card Fraud
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Thomas Law Firm
Located at 945 East Paces Ferry Road, Resurgens Plaza, GA 30326.

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