Urban Legend Number 4: I have just received a new credit card in the
mail. Instead of my signature, I always write “Ask for ID,” “Check
ID,” “See ID,” or something similar. This prevents fraudulent use
of my credit card, because a store clerk must verify my identity before
allowing a purchase on my credit card.
The Reality: False.
A credit card signed with anything other than your signature is invalid
by the terms of your agreement with the credit card company.
One of the purposes of signing your credit card is to accept the
contract terms you have with the credit card company that provided you
with the credit card.
If you have a signed your credit card with “Ask for ID,” “Check
ID,” “See ID,” “Compare Signatures,” or something similar, the
store clerk has the option to not accept the card for a transaction
until it is properly signed. The merchant takes the liability for
fraudulent transactions on an unsigned credit card.
A store clerk may actually require you sign the credit card with your
full signature before the card can be used for a purchase. If you refuse
to sign the credit card in front of the store clerk, your purchase may
be refused because the credit card is invalid.
If a merchant accepts an unsigned credit card, the merchant risks
financial liability if the purchaser later disputes the charges for that
Also, do not assume any merchant will ask you for additional
identification when your credit card is used. A merchant is not
obligated to ask for any identification at all before allowing use of a
valid credit card that is signed. However, many merchants do have their
own security policies regarding this issue.
In fact, the merchant handbooks provided by many major credit card
companies clearly state that a credit card sale cannot be conditioned on
a purchaser providing additional identification when a valid credit card
(i.e., properly signed) is presented.
Polly’s Pearls of Wisdom: As a consumer, you are protected by law
from any fraudulent use of your credit card. Because of this law, using
anything other than your signature on your credit card really does
nothing useful at all.
Many people do not sign their credit card because they are concerned
that a thief will counterfeit the cardholder’s signature. Fraud
liability falls on the issuing bank and ultimately on the merchant who
initiated a fraudulent transaction.
Abide by cardholder guidelines: sign your card when you receive it,
activate it in a timely manner, monitor your monthly statements, and
notify your bank if suspicious activity takes place.
A request for identification may not always work to prevent credit card
fraud. If your credit card has been lost or stolen, there is a good
chance other pieces of your identification have been lost or stolen as
well (e.g., your wallet or purse was also stolen).
If your credit card has “Ask For ID” on the back and the store clerk
asks for a signature, the thief may simply sign it with his/her own
fraudulent signature in front of the store clerk.
A thief may also present both your stolen credit card and other stolen
pieces of identification (i.e., typically identification without
pictures) to fraudulently use the credit card for purchases.
The credit reporting bureaus, credit card companies, and other business
organizations offer credit monitoring services, identity theft
monitoring, and identity theft insurance.
All three credit reporting bureaus and other companies can provide
credit monitoring services for a monthly fee. The three major credit
bureaus also offer additional services, such as access to your credit
reports, credit scores, and identity theft protection.
Such credit monitoring services send you a paper letter, e-mail, or text
message (depending on your preferences) if there are any new inquiries
to your credit reports. However, many types of identity theft actions
are not detected by such credit monitoring services.
The credit monitoring services typically cost $10-$25 per month, or
$120-$300 per year. Many consumer advocates question whether the cost is
worth the money paid for the type of actual protection received.
One of the problems with credit monitoring services is that you may not
receive any notification until after a negative entry is actually added
to your credit report. At the point a negative entry appears on your
credit report, a nefarious act has already taken place. It is typically
more difficult, time consuming, and expensive to try to fix an identity
theft problem at that point than if you had been able to detect it
before it was reported to the credit bureaus.
One advantage of identity theft monitoring services is that they alert
you to identity theft at the point someone else is trying to use your
information to apply for a new credit card, mortgage, or loan. It is
typically much easier to prevent identity theft before it happens rather
than remove it after it happens.
Excerpted from "THE PLASTIC EFFECT: How Urban Legends Influence the Use and Misuse of Credit Cards" by Polly A. Bauer. Copyright © 2012 by Polly A. Bauer. Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher. Excerpts are provided solely for the personal use of visitors to this web site.