Would you lie to your bank if it meant protecting yourself from identity theft?
Although some cardholders indicate they would stretch the truth to keep themselves safe — telling the bank a credit card was lost or stolen when, in fact, that wasn’t true — lying could actually end up hurting you, experts say.
In a recent blog, I described how data breaches have driven my bank to re-issue my credit card twice this year. Readers responded to that blog post with some great comments, detailing their own experiences of compromised credit card information. One comment in particular stood out.
A reader named David described how, although his Bank of America debit card was compromised, he never received any notification of a data breach from the bank. “It turns out that BofA had been processing ATM charges against my checking account for several months,” David writes. “Upon review, innocent-looking charges were on my statements, such as ‘e-Bill Pay $ 39.00.’ As I paid credit cards and other bills through this account, and the amounts were relatively small, these transactions did not stand out. But the problem did not stop there. Because my business checking and savings accounts were LINKED (which is required for you to transfer funds from one to the other), BofA KEPT PAYING FROM MY SAVINGS ACCOUNT even when the bogus charges became more obvious.”
David includes further details about his debit card experience from hell (including what he viewed as a poor response from BofA), then offered the following advice for fellow cardholders:
“As a matter of basic security, and even if you have to lie about it for your own protection, it’s a good idea to have your card reissued, with a new account number, periodically. It might be the best way to proactively protect yourself, and to a large degree, you are the first line of defense against fraud, and sadly, maybe the ONLY line of defense. Changing the card number will do more to protect your account than any other single thing you can do,” David writes.
But will lying to your bank really keep you safe? To find out, I asked several experts.
“I have not heard this recommendation before. I would not advise it,” says Edgar Dworsky of consumer education website ConsumerWorld.org. “You will have to lie to get the card reissued because you will have to say the card was lost or stolen or used fraudulently. How many times can you do that with the same issuer?”
“There is also a maximum liability of only $50 under federal law to start with for fraudulent charges on your card, and many banks advertise zero liability,” Dworksy says of credit cards. “So you are not preventing a loss of money by getting a new card number issued.”
The U.S. Federal Trade Commission also discourages lying to your bank. “We would not recommend that advice. It could cause more problems than it would solve,” says Lisa Schifferle, an attorney in the FTC’s Division of Privacy and Identity Protection. She explains that since the consumer’s credit report may list each new card issuance, that approach could impact the cardholder’s credit history. “It may appear to be many accounts instead of one account with the number changing over time,” Schifferle says. Since a lengthy credit history can help your credit score, chopping a long-standing account into smaller pieces could hurt you, she suggests.
Instead, if you’re worried about card security, try the following:
Check your credit reports and account statements. “I think the best way to prevent card fraud is to monitor credit reports regularly,” the FTC’s Schifferle says. By visiting AnnualCreditReport.com, consumers can request a report from each credit bureau once every 12 months. Look over those reports for any errors or questionable items (such as unrecognized charges or accounts) that could signal ID theft. Debit card holders should check their bank account statements. Contact the bank and credit bureau about anything odd you find.
Get a virtual card number. “Consumers would be smarter to obtain virtual card numbers for use when making an online transaction so an unfamiliar merchant never gets your real number,” says ConsumerWorld’s Dworsky. Use of temporary card numbers — issued by your bank — ensures that even if the number gets stolen, thieves don’t have the information for your actual account. Contact your bank to find out if it issues virtual card numbers, since not all of them do. Discover, for example, just this week announced plans to terminate its temporary-number program.
According to experts, honesty may be the best policy. But do you agree? Have you ever misled your bank? If so, what made you lie?
Let me know in the comments section below.
See related: Despite lingering online fears, virtual credit cards stall