In the wake of the Target data breach and subsequent news where it was revealed that more than 70 million consumers have been affected, one industry expert reveals the most important thing consumers need to do to ensure they are protected.

Jason Oxman is the CEO of the Electronic Transactions Association, which is an industry organization that represents the payments technology industry. It has more than 500 member institutions, including American Express (AXP -1.20%), Visa (V -1.07%), MasterCard (MA -0.70%), and countless others, that each year process more than $4 trillion in payments.

While many consumers have thought to turn to cash and neglect credit or debit cards altogether, Oxman said the credit card system "really is the most reliable and secure form of payment" and noted that if people have cash that is lost or stolen, they'll probably never see it again. However if a fraudulent charge is made on a card, consumers can report that charge to their credit card issuers to ensure that the charge is waived, and they aren't required to pay for a transaction they never made.

Federal law states that consumers can only be held responsible for up to $50 on an unauthorized credit charge purchase. However, MasterCard, Visa and Discover Financial Services note that they have zero-liability policies, and although American Express doesn't use that exact language, it comes pretty close. In the companies' own words:

  • "Have peace of mind knowing that the financial institution that issued your MasterCard or Debit MasterCard card won't hold you responsible for 'unauthorized purchases.'"
  • "Visa's Zero Liability policy is our guarantee that you won't be held responsible for fraudulent charges made with your card or account information."
  • "If someone steals your Discover card account information, remember that our $0 Fraud Liability Guarantee means you are never responsible for unauthorized transactions on your Discover card account."
  • "When you use your American Express card, you are not liable for fraudulent purchases."

The best way to protect yourself
But first, there's one simple thing Oxman says every consumer must do:

I think it is vitally important for consumers to be aware of their accounts. And that means, quite simply, doing something that all too often people don't do, which is look at your statements. Go online and log into your account and make sure you don't see anything strange on there, and you don't see any charges you didn't authorize.

Jason Oxman.

Oxman went on to explain that the card issuers "go above and beyond what is required in the federal law," by providing the zero-liability protection. However, to take full advantage of that protection, consumers must report that their cards have been used in an unauthorized way. And to do so, consumers first must see the purchase by reviewing their account statements.

And while it may at first seem like a burden to check the account every few days, doing so would also provide the added benefit of greater awareness around spending habits, which would probably lead to greater discipline in regard to personal finance.

Oxman summed up that "the No. 1 tip that a lot of us forget ... is just be aware of what is happening on your account, and if you see something that is not supposed to be there, report it."

All told, the data breaches and evidences of large-scale fraud at Target, Neiman Marcus, and other places are certainly frightening, but one can only hope it leads to greater awareness of both the available protections as well as potential dangers.