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Are You Ready for a Cashless Society?Credit Card Information Possibly Compromised at Internet Retailer Monoprice - How to Protect Yourself Against Fraud
The internet retailer Monoprice recently disclosed on its website that some customers had reported their credit card information had been misused. Monoprice is currently investigating this, and in the mean time they have suspended taking credit card payments. Monoprice is a popular internet retailer of cables, components and accessories for computer and consumer electronics.
Several Fatwallet members who have shopped at Monoprice have reported suspicious credit card charges in this FW thread. There were also several recommendations in this thread about how you can protect yourself from these incidents. I've reviewed several of them below. Each has some pros and cons to consider.
Use credit cards instead of debit cards on the web
The main issue with debit cards is that money is debited from your checking account, and then you have to work to get it back if it's a fraudulent purchase. There are protections for fraudulent debit card use, but they are typically not as good as compared to credit cards. According to the FDIC Consumer News:
[Debit cards] are considered less beneficial than credit cards for major purchases or buying items online because of the more limited protections in cases of unauthorized transactions or disputes.
I have more discussion about debit card protections in this post.
Use a credit card that offers virtual credit card numbers
This PC World article has a good review of virtual credit cards. According to the article:
If you have a credit card (not a debit card) from Bank of America, Citibank, or Discover, or if you use PayPal, you already have free access to the feature. A new online service called Shop Shield also provides various levels of protection.
Use PayPal or Google Checkout for internet purchases
These services allow you to make purchases at websites without disclosing your credit card info to the online retailers. However, it should be noted that many people have reported issues with PayPal such as accounts being frozen.
Sign up for credit monitoring services
I'm not sure how this will help with unauthorized credit card purchases. If more than just your credit card info is stolen, these services may help a little. However, according to Clark Howard, a credit card freeze is much more effective and less costly. Some banks such as MetLife Bank offer free services to help protect you against identity theft.
Regularly review your credit card accounts
Credit cards already have many fraud protections in place. You just have to regularly review your accounts for unauthorized purchases. If you find any, you can then begin the dispute process. If you have trouble regularly reviewing your accounts, you may want to consider services like Mint.com (see my review).
Do you have any tips to protect against credit card or debit card fraud? Please leave a comment if you have any suggestions or insights.
Aggregate Limit of Insurance: $ 1,000,000 per policy period
Lost Wages: $ 1,000 per week, for 4 weeks maximum
Travel Expenses: $ 500 per policy period
Elder Care and Child Care: $ 2,000 per policy period
Deductible $ 0 per policy period
Their policy states: "We shall pay you for the following losses incurred as a result of a Stolen Identity Event", defined as follows:
Stolen Identity Event means the fraudulent use of your name, address, Social Security number, bank or credit card account number or other personally identifying information or other method of
identifying you. This includes, but is not limited to, the fraudulent use of your personal identity to establish credit accounts, secure loans, enter into contracts or commit crimes. A Stolen Identity Event
does not include the theft or unauthorized or illegal use of your business name, d/b/a or any other method of identifying your business activity.
So far so good. If your debit card gets hacked, that would seem to fall into the definition of a Stolen Identity Event. Then what about coverage? One of their defined loss categories is as follows:
Unauthorized Loss of Funds Reimbursement
The principal amount of money, exclusive of interest and fees, incurred by you and caused by an Unauthorized Loss of Funds Event first occurring during the policy period for which you have sought reimbursement from the Outside Entity which issued the Access Device and holds the Account from which funds were stolen, and for which you have not received reimbursement from any source.
An Unauthorized Loss of Funds Event means a Fund Transfer from your Account initiated by a person other than you without the actual authority to initiate such transfer and from which you receive no
benefit. Unauthorized Loss of Funds Event does not include a Fund Transfer initiated: 1) by a person to whom you knowingly furnished the Access Device to your Account, unless you have notified the
Outside Entity that transfers by such person are no longer authorized; 2) with fraudulent intent by you or any person acting in concert with you; 3) by the Outside Entity or its employee; or 4) from any
business or commercial account.
I have asked for and received in the mail a copy of the Master Policy. I have reviewed it and have found no fine print to negate the above. IMHO once you list your debit cards on their site you are covered under the million dollar policy. I have not had to find out whether they'll come through in the case of a hacked rewards checking account. I hope I never have to. But these days, rewards checking is the only decent, short-term, liquid, principal guaranteed return out there. I pursue it vigorously using six accounts to their max. This Identity Guard service has me sleep a lot better at night.