Recovering From Bank Fraud

What to do if your bank account is wiped out

Patricia Washington  (Photo by Alex Jones)

Patricia Washington (Photo by Alex Jones)

Last October, Patricia Washington’s doctor’s office informed her that her debit card payment for the last office visit was declined. She called her bank and learned that not only had that transaction been declined, but several checks bounced and her account was overdrawn.

“A check for $602 written to Home Depot had cleared my account,” says Washington, 34. “Someone took my bank routing and account numbers and duplicated my check by sending the information to a mail-order check company. Then the criminal wrote the fraudulent check to Home Depot.”

Washington filed a report with Bank of America, which refunded her money within two days, including overdraft fees.

Approximately 71% of organizations experienced attempted or actual payment fraud in 2010, according to the Association of Financial Professionals. Legislation such as Dodd–Frank,  the CARD Act, and  the Fair Credit Billing Act have been helpful to consumers with credit cards, but the rules undergirding fraud protection remain inadequate for bank cards: The protections for debit cards under the Electronic Fund Transfer Act are much weaker than those for credit cards. “A lost or stolen debit card is typically a much bigger headache (and a more expensive loss for the cardholder) than a lost or stolen credit card,” says Joe Ridout, consumer services manager for Consumer Action, a financial education organization.

It’s important to understand how criminals steal banking information. Many use cell phone-sized devices with a magnetic strip called a skimmer to retrieve data from your bank card. Skimmers can be used at an ATM, gas pump, and even at a restaurant. Hidden cameras and Dumpster diving are other means.

“If you discover that someone has wiped out your bank account, call the bank immediately. Contact anyone who gets automatic payments such as mortgage and insurance companies, to explain that payments may be late or not go through,” advises Justin Pritchard, a certified financial planner and banking expert at About.com. “You may want to get a letter from the bank saying you were a victim of fraud, and provide police reports to anybody you’ve paid late. It could be harmful to your credit if you don’t document the fraud,”  says Pritchard.

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  • Niecy

    If possible try not to use your bank debit card in places that you buy from on-line or in person…safer to use a pre-loaded card and draw it down as low as possible. It will be a headache to keep reloading the card, but better safe than sorry. Also, keep watch if the person continually swipes your card or tells you that their machine is down then walks off with your card to the office or another machine. All red flags, watch to see if they swipe your card below the register; using a skimming device. I’ve worked in retail and saw how the crooks would come in with fancy fake credit cards or bank cards. All they need is your numbers and name. They make up the rest. The banks should do more to identify people. What happened to using a person’s photo? May have to using thumbprint devices…something I don’t know what.

    I think also, that stores should stop printing your whole number on receipts along with your name, people often lose their store receipts….Recently there was a cafe next to my job that I frequented every day and used my debit card, well the store close down and with in the next week my card is being used in a completely different state. I had my card with me, but what made me think of them, is that one of the managers kept telling me that he needed a vacation and was trying to go to FL. I had not had any problems with my account prior to them closing and with no notice.

    Lastly, be paranoid about checking your transactions daily…that way you can notify the bank and police the same day.