Credit Card Loss Protection is not Necessary
To Prevent Fraudulent Debt

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If a wallet or purse is lost or stolen a thief often begins using the credit cards immediately. They realize that once the incident has been reported it will be very difficult to use the cards so time is critical. Thousands of dollars can be charged within minutes of a theft.

This potential for danger has spawned a niche industry which offers protection on your credit cards in the event that they are lost or stolen. For a fee, companies offer you protection that could save you untold amounts of money. The idea is to prevent you from accruing large amounts of debt if your cards are run up. On the surface this sounds like a great idea, but there is one small problem. This offer is a SCAM. Federal law has mandated that in cases of illegal credit card activity an individual is only responsible for paying a total of $50.The goal of this fraudulent scheme is to collect a "fee" and/or to gain personal information to carry out identity theft. This scam is carried out using telemarketers and may include the following warning signs:

• Claims that your credit card is in danger of being accessed and charged through computers.
• Claims that the caller is affiliated directly with your credit card.
• Statements claiming that you are liable for amounts exceeding $50.
• Telemarketers selling protection that ask you to verify your credit card account number.

The loss or theft of credit cards is a serious issue that should be reported immediately. If you fail to report the incident then you will be expected to pay whatever charges are accrued. However, if the incident is reported the law limits your liability and makes loss protection unnecessary.

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.