Debit Card Fraud

[gml120]

This is reference to my mom who is not technically savvy enough to use a forum. On Dec 15th, 2012 her debit card (from a bank, linked to her checking and savings account) was somehow copied using the same numbers as on her card and subsequently used everywhere from ~25 miles close to her home to several hundred miles away. It was used POS with PIN entered at stores like Walmart, Walgreens, a few restaurants and also many times at ATM machines.

This happened over a course of about 3 weeks until the bank alerted her to possible fraud when a purchase was made in a far away state, $400 some dollars POS purchase at a Walgreens. She then went back and looked at her account online and discovered the rest of the fraudulent charges (even one at a WalMart of $2200). Yes, I know she should have noticed these ridiculous purchases WAY WAY before the bank called but thats a lesson I've been trying to teach her for too long with no luck.

Anyways, my question is: With her being the only person on the account, only one card in existence and in her possession the whole time, how can this have not been caught by the bank and also by her LifeLock protection plan for such a long time? To clarify: People used her card and she used her card on the same day with the same pin in different states. What does this community think is a good course of action (after the usual account freeze, and filing disputes on the charges)?

[sbatman]

debit card vulnerability

My debit card never made it into my hands. It was stolen from my mailbox and never activated (per USBank) Nevertheless, the thief-they knew who it was, but it was too expensive and of a hassle to prosecute per the representatives I spoke to. In any case, many charges were made, mostly for Redbox (warning-never use-there is no verification at the actual redbox), google cloud, Sonic restaurants (several charges-I guess that they don't verify cards either), and other miscellaneous charges. I cancelled the card and charges were still being approved and debited from my account after that. Bank wasn't able to explain it except I HAD MADE(!!!!) those fraudulent charges with the stolen, never activated, cancelled debit card. It was an unending hassle to get the fraudulent charges off my account. I would call and they would come off and three days later, the charges would appear back on my account. Over and over and over. Each time it happened, I would call and the representative would get the charges off and then for some reason, they were added on. I finally got the answer out of one of the reps. It was because "We've determined that you made the charges and are fraudulently trying to avoid them. Because the charges were all made in my neighborhood. Duh! One of my more honorable neighbors probably stole the card!

So, I was defrauding the bank for charges that were made from a stolen, unactivated debit card that I never received. After about two months of constant calls, documentation, charges going on and off, it was finally fixed.

The moral of the story is that I no longer use debit cards. It is still possible to receive plain old ATM cards if I need to access my money (two credit unions and a bank). I would never use a debit card for anything. I got a laugh from one of the reps when she said I had all rights of legal protections while using a debit card. I told her that I had all the rights to use a crosswalk, that doesn't mean I could use that right after I get run over and killed by some negligent driver.

I hope that your mom has better luck than me. It was good lesson that debit cards are very vulnerable because they go right into your checking account and steal your money. Unlike a credit card. Even if you don't qualify for a credit card, you can get a prepaid card. American express has a fee free one on their site. Walmart has one, you pay $5 for it at the store to activate it, or it is free online. Even if someone gets a hold on it, they can't charge more than what you've loaded on it.

Last note, to add insult to injury, I was told if I emptied or closed that checking account, I was responsible for those charges and any penalty fees if the fraudulent charges were to overdraft or debit my closed account!!! So I had to leave money in the account while this entire mess was going on. And it takes a good while to move a direct deposit.

[gml120]

Thanks for all that input and I'm sorry to hear of all the **** you had to go through I have a sinking feeling that she won't get most of the $4k that was stolen just because of the time elapsed between the first fraud and now. Is there any point in calling cops and filing some kind of identity theft report or would it just be wasted time? Sometimes I think all this new technology is just like an open door to the cash you used to have under your mattress. I'm just mostly hoping I can convince her to close her account at that bank after all this is over, she has like a sentimental attachment to this bank because she's been using it since like 1970 and doesn't realize the extreme differences between today and then.
Thanks again!

[sbatman]

I was told that calling the police and getting a report wouldn't make a difference for such a small amount. Perhaps it may make a difference for the original poster. Have they looked at the fine print on the contract? Often the bank people don't have a clue as to your rights, applying them to your account and you will get the run around with a different person every time. Also, usually a phone call does not constitute a legal appeal. If you don't send a letter within the prescribed time on the contract, all the phone calls in the world will not enforce your rights as a consumer.

What I do with issues such as these is to take a note pad and every action I take, I put down the time and date, save any corresponce (registered letters are great to help, also copies of the account statement). Then, for every call you make, you write down the time, date, to whom you spoke, what department, extension number, and what they said. AND, ask them when you can expect from the person and when and where you need to call if the action is not done in a timely matter.

I didn't do a written appeal since USBank and I caught the charges within 24 hours of the first fraudulent charge. I had plenty of time to resolve the issue by mail if it wasn't resolved by phone. I like the charge the thief made to Tilley (expensive clothes retailer). The bank had the name and address of the culprit or his stooge. Even though the charge was more that $100-they didn't bother prosecuting even that one charge! Too much hassle, they said.

With my "small" matter, I had two pages of the phone call records.

[justbroke]

In my case, a popular grocery store chain in Florida (not Publix) had all debit/credit cards compromised. I too found out someone making charges in California! They were at Toys-R-Us and even Radio Shack and some other stores. I shut them down because I personally noticed it before the fraud call! (I travel a lot so the bank probably didn't think my debit card usage was abnormal.)

In any event, I filed a complaint under Regulation E and the bank gave me a "temporary" credit back to my banking account for the amount of the charges. I personally called the Toys-R-Us store and talked to the manager. They filed a police report for themselves (at my banks request). They checked the surveillance photos and they told me that a person used an actual card that was embossed with a name that was NOT MINE, but had my debit card number! Vindicated!

So, I would make sure that you understand the rules that a bank must follow. They must not hold you liable for the first $50 (I think) if you report within so many days of "knowledge"!

[GoingDown]

The moral of the story is that I no longer use debit cards. It is still possible to receive plain old ATM cards if I need to access my money (two credit unions and a bank). I would never use a debit card for anything.

This is so TRUE! Back when I had a checking account, I had a debit card that I foolishly used online for various things. Fortunately for me, I had very little money in that account. Someone hacked into one of the websites I used the debit card to purchase something on and started using my card to buy things in far away places. I received an automated call from my bank asking me to confirm the last 3 purchases made with my debit card, which immediately alerted me to the problem and I drove to my bank and told them that someone was fraudulently using my debit card and asked them to cancel the card right then. I later closed that checking account and I thought that would have been the end of it, since there was no longer any money in the account for them to steal, and the card number had been cancelled. One year later, I again got a call from my former bank, saying that there was suspicious activity involving my old cancelled debit card in Romania! I told them that the card had supposedly been cancelled, and that I had even closed the checking account, and therefore there would be a zero dollar balance from which for the debit card to draw. They told me they had declined the charges made against the debit card-- but get this-- only because there was no money in the account to pay them!

Anyone who uses a debit card attached to a checking account is at risk.

So yes, never use a debit card for anything!

Is there any point in calling cops and filing some kind of identity theft report or would it just be wasted time? Sometimes I think all this new technology is just like an open door to the cash you used to have under your mattress. I'm just mostly hoping I can convince her to close her account at that bank after all this is over

I would definitely call the cops and file an identity theft report immediately. It may help her get back some of that money.

Sadly, your money is often safer under your mattress than it is inside a bank.

And yes, once the initial matter is settled, get that money out of that bank and put it somewhere safe. The thieves are likely to keep on trying to use that number.

I was told that calling the police and getting a report wouldn't make a difference for such a small amount.

The bank had the name and address of the culprit or his stooge. Even though the charge was more that $100-they didn't bother prosecuting even that one charge! Too much hassle, they said.

It does make a difference, as it might come in handy down the road a bit, if this matter comes back to haunt the poster.

The banks don't care. It's your money, not theirs. If it was a credit card, they might be more inclined to prosecute. Their lack of prosecution on these matters just emboldens these criminals to strike again.

In any event, I filed a complaint under Regulation E and the bank gave me a "temporary" credit back to my banking account for the amount of the charges.

Could you give more details about filing a complaint under Regulation E?

What would a sample letter using this complaint look like? What would it say?


Oh P.S.-- I wanted to point out to everyone that whenever I make a purchase online these days, I try to use the store card associated with the store I'm shopping at. For example, if I am making a purchase at Amazon, I first figure out about how much it is going to cost, then I go to my local grocery store, buy an Amazon gift card with cash, and then use the Amazon gift card to make the purchase. That way, if anyone hacks into my account, they aren't going to get much at all, and there will be no lingering fallout from their hacking. No debit card to shut down, etc.

[justbroke]

There is no letter. Just call the fraud department of the bank and ask for a claim under "Regulation E". If they don't understand what Regulation E is, ask to speak with a manager (or supervisor). You have certain rights.

As for me, I have a "dummy" debit card that I transfer money to when I need to use the debit card. I do not give anyone my debit card that has my account with the bulk of my money! You can't even trust a large retailer!

[ksgirl38]

I would definitely file a police report. If nothing else it gets it on record.

I'm a little surprised that it took the bank so long to contact your mother and alert her to a problem. Anymore it seems like most banks and credit card companies are more on top of these types of things. I remember having to verify a purchase I made on my debit card back in November. I got one of those prerecorded messages to call and verify the charge. Those out of state charges should have been a red flag to the bank. Sounds like someone wasn't doing their job. Retailers have become so lazy in how they accept credit now that they rarely look at the card. It makes it easier to get away with using a card fraudulently. I hate to think how much the banks and credit card companies write off each year in fraudulent charges. It's usually pretty easy to file a dispute on a charge.

I'm not a fan of debit cards either. I always use mine as a Visa just for this reason. It makes it easier to dispute if there's a problem. About 10 years ago I had my card used by a family member and immediately had the card closed out. I just started using mine again recently.

[gml120]

Update: The bank has replaced the money that was stolen. However, I was unable to convince her to close her account there and she continues to use the account. I have my fingers crossed that it will be ok for her in the long-term. Thanks for all the replies
Edit: Also, I was unable to get her to file a police report so I have no news there either.

[AngelinaCat]

Here is our saga of what happened when we attempted to use our card in Mexico:

http://www.bkforum.com/showthread.php?79308-Fake-ATMs-and-or-Skimmers

Our situation is not totally resolved yet. We had to fax a letter of dispute to the fraud division of our institution. They are investigating, and have returned our funds to us, but it is still 'provisional' at this time.