Debit card fraud? Act fast to protect your money

LM Otero/AP

FILE - This file photo taken Tuesday, May 3, 2011 shows a Visa card in a wallet in Richardson, Texas. (AP Photo/LM Otero, File)

By: Margarette Burnette, Nerd Wallet

Maybe you see an unfamiliar charge on your bank statement. Or you notice your debit card isn’t in its normal place in your wallet. If you suspect bank account fraud, now is the time to take action. Otherwise, any money that’s missing may be gone for good. Here’s what to do.

Report unauthorized transactions ASAP

If you suspect your card has been lost or stolen, call your bank’s fraud hotline right away. This is the most important step to preserve your funds.

You can be relieved to know that if you report the missing card before any unauthorized charges are made, you won’t lose any money, as the bank can lock or cancel it.

If fraudulent charges have been made with your missing card and you file a report with your bank within two business days of discovering them, your bank could subtract up to $50 from your reimbursement, if you receive one. According to the Federal Trade Commission, your maximum loss can be $500 if it’s determined you reported the lost or stolen card more than two days after learning about it.

But if you wait longer than 60 days after the bank statement is sent to you — the one with the unapproved charges — you could lose all the missing money. In addition, you could lose money from linked sources, such as funds that were transferred from an overdraft account into the compromised checking account.

If your physical card isn’t lost or stolen, but someone fraudulently uses your debit card number, you still need to report the fraud, but there’s a slightly different timeline. You won’t be responsible for the unauthorized transactions as long as you report them within 60 days of the bank statement being sent to you.

After you report the fraudulent transaction, the FTC recommends following up with a letter or email.

Account frozen? Submit documentation

Even if you don’t report a debit card loss, if your bank suspects fraudulent activity, it could freeze your account while it investigates. You may be asked to mail or upload to your bank’s secure website any identifying information, such as your Social Security number and a copy of your driver’s license. You might also be asked to explain any flagged deposits and withdrawals to prove whether or not fraud occurred. Each situation is different, so it’s important to read your deposit account agreement carefully and understand your bank’s specific policies.

Ask your bank for relief

If money is fraudulently taken from your account, and the drop in your balance results in overdraft charges, ask your bank to waive the overdraft fees. You can also ask your bank to give you a temporary credit of the disputed funds until it can complete its investigation if you don’t receive one automatically.

If you have another funding source you could access quickly, such as an emergency fund savings account, you can use it to pay for expenses while the bank investigates the compromised account. But if you don’t have a rainy-day fund, consider other options to raise money fast, such as seeking community assistance or asking your employer for an advance. If you’re looking for backup account options, see NerdWallet’s list of best high-interest savings accounts.

Monitor bank transactions online

If your debit card is lost or stolen — as opposed to someone accessing your account online — your bank may cancel the card but keep the account open. In that case, regular monitoring can help you make sure the thief hasn’t figured out how to get into your account.

You can generally see up-to-date transactions in your checking account on your bank’s mobile app or its website. Be sure to check it regularly for unfamiliar transactions.

Know the bank’s timeline

After you report fraud to your bank, the institution generally has 10 business days to conduct an investigation. If it finds that money was taken from your account fraudulently (or there was some other type of financial error), the bank has one business day to correct it and three business days to notify you of the results in writing.

If you’re unhappy with any part of the bank’s actions, you have the right to file a complaint with the Consumer Financial Protection Bureau. This government organization regulates consumer financial products and can be reached online at consumerfinance.gov or by phone at 855-411-2372.

The bank will have a chance to respond to your complaint, generally within 15 days, though it could take up to 60 days. You’ll then have 60 days to offer feedback on the response. As part of the process, the CFPB will publish the complaint to a public consumer complaints database with personal information removed.

Rebounding from bank account fraud

It’s scary to think of someone accessing your checking account without permission. If it happens, you do have protection from debit card fraud. But that protection depends on when you notify the bank. Report it quickly to have the best chance of shielding your account and bank balance.