Many fail to realize that their credit card accounts are very much a component of their portfolio. A component that has the potential of carrying incredible amounts of risk. As the Associated Press reported today, the federal government has just charged Albert Gonzales “with the largest case of credit and debit card data theft ever in the United States.” Gonzales already had charges pending against him for another credit-card theft case. If you combine all the charges together, Gonzales is, in sum, reported to have stolen over 170 Million credit and debit card numbers from the computer systems of:

7-Eleven
Hannaford Brothers Co.
Heartland Payment Systems
Dave and Busters
T.J. Maxx
Barnes and Noble
Sport Authority
&
OfficeMax

Yes, that’s right: 170 Million card numbers. The Experian Marketing Insight Snapshot reports that in the 4th quarter of 2008, the average American consumer had 5.4 cards. The census bureau projects that by 2010, 181 Million Americans will have at least one credit card. It’s impossible to know exactly how probable it is that your Credit/Debit card has been stolen, but, when 170 Million are stolen in one case alone, you have to consider it a possibility.

So, what can the average investor do to protect themselves from this type of theft? Unfortunately, not much. In these cases, the cards are being stolen from the mainframes of businesses, not from your trashcan, recycling bin, email, or pocketbook. If you own credit or debit cards, you are taking the risk that the card numbers will be stolen. The only way to protect yourself is to only use credit cards and checking accounts that provide 100% forgiveness of fraudulent transactions. Many companies offer this, but some don’t. A few companies only offer fraud protection as a subscription. Others only offer it on certain cards. It behooves you to read your credit card contract carefully. If you can’t find your documentation, call your company and request more, but also ask the representative if you’re protected.

Remember however, that, in the Gonzales case, debit cards were stolen as well. You need your checking account to be protected just as much as your credit card accounts. It’s not only important that the bank/company forgive fraudulent charges; it is important how quickly they do so. With some banks, you could lose your checking account balance for weeks if your card number is stolen. They will make you fill out form after form and will take their time to process each one. Other companies will assume that you’re telling the truth and will credit your account for the charges immediately then investigate the matter on their own . When you contact your bank/credit card company, make sure you ask them about the specifics of the process you must endure to retrieve your funds if your card number is stolen.

If your card company doesn’t protect you, then you should seriously consider whether the potential risk of owning that card is worth the reward.

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