Clearing Up Credit Fraud

What you should know:
In most cases, your liability when a thief steals your credit card and hits the mall is limited to $50 per card. (Some banks and card companies offer $0 liability—an even better deal.) To take advantage of this deal, though, you need to act promptly.

What you should do:
From the time you receive the credit card statement listing the fraudulent charge, you have 60 days to dispute that charge. This is true even if the thief changed your address and you never actually received the statement listing the $5,000 he spent on Elvis memorabilia—so keep track of your billing cycles! When you write to the credit card company, include your name, account number, and a detailed list of the fraudulent charges, including the date and the amount. Make sure you address the letter to the billing inquiry department, and—all together now—send it certified mail, return receipt requested. Don’t forget to include all relevant documentation.

What they have to do:
The credit card company has 30 days to let you know they received your letter, and must resolve the dispute within two billing cycles (90 days max).

What you should do then:
It’s important to get a letter from the credit card company which says that the charges were fraudulent and that they have been removed. Hang on to the original of this letter like it’s a winning lottery ticket—and include a copy whenever you write to credit bureaus or debt collectors. You’ll want to get the same kind of letter when you shut down bad credit accounts that the thief opened in your name.