Fraud Alert: PSA about debit cards.

[clh2]

So, my dad’s bank had an issue with a number of their clients getting fraudulent charges on their bank-issued debit cards.

In doing some research, for this particular banks, account owners have the ability to set limits (max transactions both in $$$ and frequency, allowing (or not) international transactions, as well as notifications based on selected parameters.

To be honest, I’m not sure why my dad has a debit card. My dad is 88. He primarily uses this card to go to his bank and pull out cash from the ATM once a month. He could most likely ditch the debit card and just go inside the bank and do a withdrawal during business hours.

In our family dynamics, a different sister has financial POA, so she should be a little more pushy on this topic with him, but she is merely satisfied that the bank fixed this particular issue, I am a more get to the root of the problem and try to make sure this doesn’t happen again type of person. So, my husband and I will try to convince my dad to take a look at these settings and get some controls in place.

But, for all of you, be sure to check these settings on your debit cards, and make sure they fit with what you need them for, and nothing else. No one needs the frustration of being financially violated.

 

[kdonnel]

Most banks, when pushed, will admit to being able to issue an ATM card instead of a Debit card.

The ATM card will lack a Visa or MasterCard logo and can only be used at the ATM.

I don't have a Debit card on any of my checking accounts because in my opinion the exposure is too great.

If my credit card is compromised, I tell the issuing bank and done. My money was never at risk.

If a debit card is compromised, there is a chance all YOUR money is drained from your account, your online bill pays bounce, and chaos ensues. You now have to call not only your bank to get YOUR money back, but you have to call each bill pay recipient that bounced and try to talk them into accepting a late payment without dinging your credit.

 

[tony67]

Agreed - one issue is many banks make it inconvenient to not use a debit card - even depositing money with a teller.
You show up with a deposit slip and they give you the third degree and want a debit card - they will take an ID as a backup - TO DEPOSIT MONEY - but they have an attitude.
I'd like to just get rid of that bank but every time I went to a different bank they bought them - so I just gave up.

I never use a debit card for anything else - its just too risky IMO - use a credit card and pay it off if at all possible.
In addition there are so many rewards and points and cash back options I'm not sure why I would ever use a debit card.

One last thing - even if you never ever use that debit card - I've had issues with it being compromised - which is 100% mind boggling.
Never used it anywhere other than the bank - at the teller.

 

[kdonnel]

One last thing - even if you never ever use that debit card - I've had issues with it being compromised - which is 100% mind boggling.
Never used it anywhere other than the bank - at the teller.

It has been a long time, but back when I worked in the credit card business, it was known that the majority of credit card fraud was internal. Internal bank fraud is sadly very common.

 

[clh2]

Most banks, when pushed, will admit to being able to issue an ATM card instead of a Debit card.

The ATM card will lack a Visa or MasterCard logo and can only be used at the ATM.

I don't have a Debit card on any of my checking accounts because in my opinion the exposure is too great.

If my credit card is compromised, I tell the issuing bank and done. My money was never at risk.

If a debit card is compromised, there is a chance all YOUR money is drained from your account, your online bill pays bounce, and chaos ensues. You now have to call not only your bank to get YOUR money back, but you have to call each bill pay recipient that bounced and try to talk them into accepting a late payment without dinging your credit.

Very interesting-especially of potentially being able to get “JUST” an ATM card as opposed to a debit card. I will actually call the bank to see if they offer this option, so I can bring it up to my dad if available.

The thing I’m most concerned about for my dad is…he keeps a lot of money there. And I know debit cards have nowhere near the protections that credit cards have. So, how can his accounts be protected.

Unfortunately, the sister who is “in charge” of his affairs DOES nothing. Sorry…that sounds like family dirty laundry, but, I just needed to vent!

 

[gottalovepluto]

There is $0 liability for fraudulent charges made to his debit card when the account info was stolen as long it’s reported within a couple months. That’s a law.

If this sister does nothing you need to be EXTRA careful in your behavior so she doesn’t go from doing nothing to locking you out of stuff because she’s annoyed at you. Save the attempts to interfere in her legal obligation for something worthwhile when she actually starts screwing stuff up.

 

[kdonnel]

There is $0 liability for fraudulent charges made to his debit card when the account info was stolen as long it’s reported within a couple months. That’s a law.

Edited to add more detailed differences between debit card and credit card liability:

Debit card fraud​

According to the EFTA, your potential liability for fraudulent debit card transactions is virtually unlimited. You have up to 60 days to report a lost or stolen card under the EFTA. After that, you simply lose whatever money was taken, even funds siphoned from linked accounts. The exact liability limits under the EFTA are:

• Lost or stolen card reported before unauthorized transactions: zero liability.
• Lost or stolen card reported within two days: $50 liability limit.
• Lost or stolen card reported within 60 days: $500 liability limit.
• After 60 days: no protection.

It's important to note that if your card is not physically lost or stolen, you have 60 days to report fraudulent transactions with zero liability. If only your card number is stolen, the 60 days start from the date of the statement on which a fraudulent transaction appears.

Credit card fraud​

Under the FCBA, your maximum liability for fraudulent credit card transactions is $50. If you report your card lost or stolen before any fraudulent transactions occur, your liability is zero. Many credit cards promise zero liability for all fraudulent transactions.




EFTA is why people should review bank statements when received, so the fraud liability is limited to $500.

Credit cards are capped at a max liability of $50.

Of course your bank or credit card issuer could have more generous policies.

 

[TinkAgainU]

It's only $0 if reported immediately.

Up to $50 in liability if reported within 2 business days.

Up to $500 if reported after two business days but within 60 days of your statement showing the fraud being mailed.

61 or more days after your statement was mailed and your liability is unlimited.

That is why people should review statements when received, so the fraud liability is limited to $500.



Credit cards are capped at a max liability of $50.


Of course your bank or credit card issuer could have more generous policies.

Thank you for sharing, I didn't know this timeline - just confirming it is nationwide and not state specific? Still have one grocery store near me that will Only take Debit Cards (and they have things I prefer to buy) so it's always stressful carrying that card around.

 

[kdonnel]

The debit card vs credit card has come up before on Disboards.

I think this page sums up why I don't have a debit card.

https://www.nerdwallet.com/article/credit-cards/credit-card-vs-debit-card-safer-online-purchases

The real difference between a debit card and a credit card when it comes to fraud is in how you get your money back. When a fraudulent transaction occurs on your credit card, you have lost no money. You can report the fraud, get a credit on your statement, and the issue will never affect your bank account.

With a debit card, your bank account balance is affected from the moment the fraudulent transaction takes place. If the transactions are significant, you could experience a domino effect of financial headaches. Fraudulent charges can tie up funds so that legitimate charges are declined or cause overdrafts.

 

[gottalovepluto]

It's only $0 if reported immediately.

Up to $50 in liability if reported within 2 business days.

Up to $500 if reported after two business days but within 60 days of your statement showing the fraud being mailed.

61 or more days after your statement was mailed and your liability is unlimited.

That is why people should review statements when received, so the fraud liability is limited to $500.



Credit cards are capped at a max liability of $50.


Of course your bank or credit card issuer could have more generous policies.

That is specifically an entirely different scenario. I said "account info was stolen" in reference to OP's situation. The FTC refers to this as "Your account number is used but your card isn’t lost or stolen" and the result is "You aren’t responsible for any transactions you didn’t authorize if you reported the loss within 60 calendar days after your statement is sent to you". FTC Link to help folks out.

^^ANYONE LOOKING FOR INFO ON THIS TOPIC PLEASE READ THE FTC LINK. STOLEN CARDS ARE LEGALLY DIFFERENTLY FROM STOLEN ACCOUNT DATA^^

 

[kdonnel]

Thank you for sharing, I didn't know this timeline - just confirming it is nationwide and not state specific? Still have one grocery store near me that will Only take Debit Cards (and they have things I prefer to buy) so it's always stressful carrying that card around.

It is Federal law.

Banks are of course allowed to have a more generous policy but in the end they only have to follow EFTA where their debit cards are concerned.

 

[kdonnel]

That is specifically an entirely different scenario. I said "account info was stolen" in reference to OP's situation. The FTC refers to this as "Your account number is used but your card isn’t lost or stolen" and the result is "You aren’t responsible for any transactions you didn’t authorize if you reported the loss within 60 calendar days after your statement is sent to you". FTC Link to help folks out.

^^ANYONE LOOKING FOR INFO ON THIS TOPIC PLEASE READ THE FTC LINK. STOLEN CARDS ARE LEGALLY DIFFERENTLY FROM STOLEN ACCOUNT DATA^^

My updated post mentions that.

But again I feel there is an important distinction between debit card and credit card liability.

Column 2 is credit cards and column 3 is debit cards.

With a credit card you have no liability. With a debit card your liability is potentially limitless even if you still have the card in your possession if you are slow to review your statements. In my opinion that is an extremely important difference.

Your account number is used but your card isn’t lost or stolen

You aren’t responsible for any charges you didn’t authorize

You aren’t responsible for any transactions you didn’t authorize if you reported the loss within 60 calendar days after your statement is sent to you

 

[wdwfan94]

I have a debit card but use credit cards for all my purchases due to earning points/rewards. My debit card has both in-store and online transactions blocked via an option I chose online.

 

[PrincessShmoo]

o be honest, I’m not sure why my dad has a debit card. My dad is 88. He primarily uses this card to go to his bank and pull out cash from the ATM once a month. He could most likely ditch the debit card and just go inside the bank and do a withdrawal during business hours.

Our credit union's ATM card is a debit/ATM card. We had them "turn off" the debit option, so it's ONLY an ATM card.

 

[tazdev3225]

My daughter and 2 granddaughters have all had fraud activities in the past 6 weeks. The bank notified my granddaughters and put a freeze on their cards. The oldest got a new card to be safe. She went on vacation a couple days later and the new card had fraudulent activity over 150 miles from where she was, in a casino. She isn't 21 so there is no way she used the card there. I may suggest they have an audit done by the credit union. I know they have had issues at the credit union before because their aunt and uncle were both fired from there for being involved in the past

 

[tvguy]

It has been a long time, but back when I worked in the credit card business, it was known that the majority of credit card fraud was internal. Internal bank fraud is sadly very common.

I had someone try and withdraw $4,000 from my checking account last year using a debit card. The bank did catch it before it went through, but when they called to say their investigation was complete they would not say how the fraud was committed. Checking the records online the attempt was made INSIDE one of my bank's branches 130 miles from here..........at 8:15 am on a SATURDAY morning. Wait, 45 minutes BEFORE the branch opened? Smells like an inside job to me.

 

[barkley]

If a debit card is compromised, there is a chance all YOUR money is drained from your account, your online bill pays bounce, and chaos ensues.

and if you have overdraft protection it can drain all associated accounts. so if dad has a checking and several savings it will drain, one by one each of the associated savings. we had this ALMOST happen when oldest's debit card was stolen-luckily it was very quickly discovered and I had online access to the accounts so I transferred the monies in them to one not associated (the hold time getting through to customer service was long enough we were concerned b/c it was draining quickly). yes, you have low liability and EVENTURALLY get your funds back but it can take a couple of weeks at minimum and if the monies in those accounts are relied upon for bills we opted after the experience to cancel overdraft protection since we always keep a small buffer in checking that would cover any math errors on our part resulting in overdraft.

 

[barkley]

I had someone try and withdraw $4,000 from my checking account last year using a debit card. The bank did catch it before it went through, but when they called to say their investigation was complete they would not say how the fraud was committed. Checking the records online the attempt was made INSIDE one of my bank's branches 130 miles from here..........at 8:15 am on a SATURDAY morning. Wait, 45 minutes BEFORE the branch opened? Smells like an inside job to me.

there's always a spike in our region when college financial aide does their quarterly direct deposits into student accounts. whoever is doing it knows down to the day when those direct deposits are going to happen and then all h...breaks loose. most interesting fraud detection call we got was for a $4000 hotel deposit for tokyo disneyland (credit union rep-'barkley are you tokyo?' me-'ummm, no-you are calling me on my house landline', credit union rep-'barkley any plans to travel there?', me-'no', credit union rep-'ok so you are good with us declining and flagging this charge?', me-'yeeeeeeeeeeeeeeeees').

 

[clh2]

You guys are scaring me. I guess the good news, if we try to limit the potential for something happening, it would be easiest to get the changes needed one time, instead of going back to my dad multiple times (and risking the wrath of my sister).

 

[tvguy]

there's always a spike in our region when college financial aide does their quarterly direct deposits into student accounts. whoever is doing it knows down to the day when those direct deposits are going to happen and then all h...breaks loose. most interesting fraud detection call we got was for a $4000 hotel deposit for tokyo disneyland (credit union rep-'barkley are you tokyo?' me-'ummm, no-you are calling me on my house landline', credit union rep-'barkley any plans to travel there?', me-'no', credit union rep-'ok so you are good with us declining and flagging this charge?', me-'yeeeeeeeeeeeeeeeees').

Yeah, I got a fraud alert on my cell phone, which I suspected was spam because I do not recall ever giving my bank my cell phone number, just my landline. But they sent me an e-mail too. I did get a similar inquiry via text and email for my next two checks which were for our long term care insurance, so several thousand dollars. I would prefer to pay those electronically but in this time, it is amazing that insurance company has no provision for auto pay, electronic pay or anything but checks.