Victim Of Identity Fraud?
It is increasingly common to hear of fraudsters obtaining credit card numbers from rubbish or discarded computers and then pretending to be the cardholder. If this happens to you how much of what was spent will you be liable for?
If your purse or wallet was stolen by a thief and you reported the theft the Consumer Credit Act 1974 would offer you good protection. You would only be liable for up to £50 of any amount spent by the thief and if you reported the theft immediately you could have to pay nothing.
The situation is different however if a fraudster obtains your personal information without your knowledge and then pretends to be you and buy things using your card details such as over the telephone or over the Internet even though you never lost control of your own cards themselves. Generally if the fraudster has your billing address, credit card number and expiry date the account can be used.
Where can a fraudster get this information? It has been estimated that nearly half of all domestic rubbish bins contain whole credit or debit card numbers and also card expiry dates. These might be on old receipts or statements which you have simply thrown away. Remember-until the Dustbin men pick up your bags of rubbish you are responsible and continue to be the owner of that rubbish.
If you can show that you had possession of your cards the law will presume that any transactions were unauthorised and so should not be your responsibility. This puts the burden on the credit card company to prove that those payments were made with your permission.
Under the Voluntary Banking Code if the company can prove you acted either fraudulently or without reasonable care you could be liable for the amounts spent by the fraudster.
If the fraudster uses the information found in your bin and spends money from your account the bank or credit card company will have to show that you acted without reasonable care at some point in the ownership of your card. If the bank cannot show this you will not be liable for any losses caused by the fraudster. However if the credit card company can prove that the fraudster got your details from your bins or that you were otherwise careless by simply throwing out all of your old receipts the law may no longer protect you.
In a nutshell if you were the victim of a fraudster who had gone through your bins and used your discarded card details to make “cardholder not present” transactions in your name a Judge or banking Ombudsman may well find you responsible for having to pay for what the fraudster has spent.
The Banking Code advises all customers to take reasonable care, to carefully dispose of credit or debit card receipts and to destroy such receipts before throwing them away.
Basically look at everything you put into the bin carefully. If it has any personal information not only could a fraudster use it but you may be found to have been acting without reasonable care and find yourself liable to pay for the fraudster’s purchases.
Simon Speed
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