Many people know the feeling of losing a credit card, and too many know what it's like to see charges you aren't responsible for on your statement. Luckily, there are federal laws that place limits on your liability for unauthorized credit card charges, ATM withdrawals and debit purchases. The first thing you should do if you've noticed unauthorized charges on your account is to notify your bank as this is the best way to limit your liability.

Liability for unauthorized credit card charges

Many people worry when their credit cards go missing or when unauthorized charges appear on their credit card statement, but if this has happened to you, you shouldn't worry. Your credit card issuer will not hold you liable for those charges as long as you let them know that you did not authorize those payments within 30 days. They will remove those charges, cancel the stolen credit card and send you a new one.

Liability for unauthorized use of you debit card

If your debit card gets lost or stolen, you should notify your bank right away to minimize any liability you have for unauthorized charges. Under the EFTA, your liability for lost or stolen ATM or debit cards is:

• $0 if you are able to report your lost or stolen ATM or debit card immediately and before the card has been used
• $50 or less, depending upon the amount that has been used, if you report your card lost or stolen within two business days
• $500 or less, depending upon the amount that has been used, if you do not report your card lost or stolen within two business days, but you do report it within 60 days after your bank statement is issued that shows the unauthorized use
• Any amount if you fail to notify the bank of your lost or stolen card within 60 days after your bank statement is used that shows the unauthorized use.

Handling credit card fraud

Always report unauthorized purchases rights away so that your account can be closed and the fraudulent charges can be refunded.

photo by 401(k) 2012 on flickr