My debit card was lost/stolen and fraudulently misused.
June 10, 2005 9:01 PM   Subscribe

Okay--I checked my checking account balance last night via my bank's automated phone line. The system told me that my balance was several hundred dollars overdrawn, and when I checked the most recently posted transactions, the amounts ($50 -75) did not immediately ring a bell.

I also knew that my shit was not fucked up to the tune of (at least quite) that much cashish. So I dial the option to speak to a live CSR, and he clues me in to the merchants with whom these transactions have purportedly gone down. I've been to none of these retailers/service providers within the last few weeks (in some cases, never; ex: Gold's Gym). I realize whilst talking to the dude that my VISA debit card is not in my wallet. I hadn't used the card in about 3 days, but I had opened my wallet several times within those 3 days and not realized my card was gone.
But I digress. Of course, we realize that the card has been lost/stolen/whatever. So he closes the card down and advises me to go to my branch in the a.m. to do paperwork and get the ball rolling to make everything all better.
I get there at 8 a.m. today to discover that their lobby doesn't open until 9. I wait around until 9 and sit down to tell Renee, the "Assistant Branch Manager" my story. She sorta acts rather nonplussed, maybe even a bit suspicious, but again, I digress. She gives me a printout of the recent activity on my card, I find out that these bitches had really gone shopping, and I fill out several forms, no problem. She directs me to a desk where I call the Austin Police Dept. to initiate a police report (the bank's fraud dept. requires a legal case # on their forms; no problem).
I initiate the report with the nice lady on the phone. She informs me that in order to include each fraudulent transaction on the police report, I must provide physical addresses for each of the merchants with whom the questionable transaction was transacted. Anypoo, no one at the bank, or anyone at their main offices (including the fraud dept.) was able to tell me exactly where the businesses which had been given all of my money, and then some, were located! The statements the branch personnel printed out for me contained every bit of the info (not much) that The Bank, at all levels, had access to. Scary. A few of the merchant names on the statement/printouts I was given had store numbers,which of course made tracking down their locations much easier.
The others were a different story. Long story short...(too late, I know, and sorry) I spent two and a half hours on the phone trying to track down where exactly some motherfucker stole this stuff with my money. Basically, I figured that if I didn't get physical addresses for the merchants, the transactions would not be included on the police reprort, and therefore i might be held liable for the fraudulent charges. I found all of the locations but one, an ExxonMobil where the transaction was only $6.83. I can live with that.
Here's the real kicker--my paycheck was deposited via direct deposit this morning, and--you guessed it, or not, if you're an optimist--the amount of all the fraudulent charges, plus the NSF fees charged by The Bank, were more than my paycheck! So I'm currently overdrawn by $150. 24, even though my paycheck was posted this a.m. I had been led to believe that The Bank would provide me with a good faith "provisional credit" of at least the amount of the overdraft charges ($200). So Renee talks to her boss, the Branch Manager, who relays to me, through Renee, that the process to credit any and all of my money usually takes less than the posted 10 business days. What a relief! But she was unwilling to even credit me the amount of the NSF fees, so I'm pretty much fucked for two weeks. Until my next goddamn paycheck.
I find it hard to believe that the Branch Mgr. did not have the discretion to credit me at least the amount of the NSF fees. I relayed, through Renee, that this created a huge hardship for me (I have no savings, no credit cards). So, even though this nightmare was not the bank's fault (and I don't really think it was mine; I've never lost a card or wallet in my life), it might be nice as a customer service gesture to perhaps expedite the process of crediting my money. Luckily I have a Plan B (family) to help me out in this emergency, but what if not? Should I ditch this bank once all my money is recredited? I've been thinking about it even before this. Are credit unions better? Why? Should I write letters? Thanks!
posted by theperfectcrime to Work & Money (24 answers total)
You need to learn to complain more effectively. You should have talked to the branch manager from the start. It's not to late, make an appointment with that branch manager or any branch manager, bring the police reports etc. and tell the branch manager that the bank will be giving you all of your money back. Whether or not it is your fault or not for losing the card, the bank is still obligated to protect your interests.
posted by lee at 9:23 PM on June 10, 2005

Let me guess that you've got an account at an Uber-Bank. They're notorious for treating customers like this. I wouldn't switch banks until you have all of your money back and all of your legal issues sorted out. Then: look for a credit union or a locally based bank. They actually care about having you as a customer, and odds are the bank owner lives in the same town you do. They'll treat you better, most of the time.

I'm really sorry to hear about your trouble. Good luck to you in getting it sorted out.
posted by croutonsupafreak at 9:29 PM on June 10, 2005

Wait a minute... How did they get your PIN? It's a debit card, right?
posted by Jon-o at 10:11 PM on June 10, 2005 don't need the PIN to charge shit to the card. It just gets treated like a regular credit card pretty much everywhere. (If it is like mine, that is. Mine's VISA-backed, though, so that may be different. But I doubt it.)
posted by graventy at 10:16 PM on June 10, 2005

At most places you can use your debit card just as you would a credit card, no pin needed. On preview, what graventy said.
posted by monkey!knife!fight! at 10:21 PM on June 10, 2005

Oh, right. I usually ignore that option.
Since your card is VISA-backed, can you contact them for any help?
posted by Jon-o at 10:23 PM on June 10, 2005

Best answer: Assuming this was a Check Card, (ATM card with a Visa logo that can be used with a PIN at a POS or as a credit card with a signature), check out Visa's Zero Liability Program. Be sure to read the second paragraph about provisional credit. The bank legally has five business days, but frequently will provide quicker service. Print the page out, go see the Branch Manager. Forget the NSF fees for now, and focus on the actual losses. If the Branch Manager does not give you what you desire (perhaps they'll give a portion now, the rest within the 5 days, which would be a decent compromise), then ask for the District Manager. If they are not available, ask for the Region Manager. If they are not available, ask for the Division Manager. Keep going until you are satisfied. Believe me, you will get what you need by acting like a terrier.

And yea, forget the big banks with their shiny branches on every corner. Find a savings bank - the service really is better.
posted by cyniczny at 10:45 PM on June 10, 2005

Some people may hate this advice, but having an emergency credit card that you don't carry with you (I have a couple accounts with cards in the fire safe along with the mortgage, insurance stuff, etc.) might not be a bad idea. Just in case, you know.
posted by nanojath at 10:52 PM on June 10, 2005

Cancel your direct deposit and call it a lesson learned. Direct deposit is a tool of Satan.
posted by ikkyu2 at 11:59 PM on June 10, 2005

Also, cancel your debit card. Those things are super dangerous. I have forced my banks to give me regular debit cards (require pin, no credit card logo) ever since that wacky program was started.

Carry one credit card and wrap a whole lot of tape around it. That way, it can be used in an emergency, but it will be a pain to use it. Desperate times call for desperate measures.
posted by jeanmari at 2:21 AM on June 11, 2005

Response by poster: Yeah--I'm definitely gonna cancel my direct deposit. What pisses me off is that The Bank is only too happy to allow transactions to go through even when the balance is negative several hundred dollars, so they can get 25 bucks a pop in NSF fees, and when my check is deposited that's automatically swallowed up as well.
I really like the convenience of a debit card, but this shit really is not worth it. I'm goin' back to checks and an ATM card.
posted by theperfectcrime at 5:07 AM on June 11, 2005

Response by poster: Thanks, cyniczny! I had been led to believe that since this was not a credit card but a debit card (although with a VISA logo, my liability is $50. This definitely gives me some ammo.
posted by theperfectcrime at 5:14 AM on June 11, 2005

It seems to me that the NSF fees are something the Branch Manager would have some discretion over, particularly when they are a result of fraudulent activity on your card. You may want to do some research on Google to find out how you might file a complaint with your state's banking commission.
posted by MegoSteve at 6:16 AM on June 11, 2005

Also, cancel your debit card. Those things are super dangerous. I have forced my banks to give me regular debit cards (require pin, no credit card logo) ever since that wacky program was started.

I'll second jeanmari's advice. [Note: I am in no way a financial advisor -- I'm simply sharing what has worked for me -- and I realize in the context of this post that I'm hindsighting, but I thought it might help others avoid the same situation.] There are huge differences on many levels between using a "debit card" to pay for things and using a "credit card" to pay for things from a credit line.

With a debit card, you're basically carrying your entire bank account in your pocket at all times, with only a signature holding that money back.

I suggest keeping your direct deposit, and realigning your bank usage so your account, which contains actual money that you have deposited, is a bit of a lock box only to be accessed in specific situations and via specific methods.

Instead of having and using a debit card, switch to a credit card for your day-to-day purchases, and control your spending during the money so that you can pay off your entire balance at the end -- think of it as a delayed-withdrawal debit account. With rewards cards like Citi Dividends, you'll even get some money back during the course of the year, just for making purchases you otherwise would have made with cash or debit.

If someone ever abuses that credit card, you can handle disputing the charges alone and not have to immediately worry about not having money for food and shelter. Also, if emergencies ever come up, you'll have cash in the bank and options for your credit, like applying for a new card and doing a low-rate balance transfer, or negotiating your APR knowing you'll have to carry a balance.

With your everyday purchases going to credit, you only need your bank account for cash withdrawals -- which can be handled via a standard ATM card -- and payment of the credit card bill and other non-credit bills such as rent -- which can be handled at home via online payment, check or direct payment (if you dare).
posted by VulcanMike at 6:44 AM on June 11, 2005

Oh, and when I said to not worry about the NSF fees at the moment and focus on the actual debt, it is because of Visa's program. However, you will get those NSF fees reimbursed by the bank as well - it will just come when they finally process everything together. The bank will not leave those fees in place when they're due to fraud. Not too sound like I'm defending them, but they do need just a little bit of time to investigate everything before they just start making reversals. Again, just speak with the manager and set your expectations with them.
posted by cyniczny at 7:27 AM on June 11, 2005

Sheesh, your bank sucks. I noticed a couple of fraudulent transactions on my debit card once. I called Bank of America (at 11 PM at night on a Friday) and they immediately canceled it, issued me a new one, and reversed the charges pending investigation. They sent me a couple things in the mail that I had to sign and I had to write them a letter affirming that I did not make the charges, and that was it.

Since yours was used as a credit card, that means someone signed for all the purchases. Demand copies of the signed receipts for all those purchases; this will give you additional leverage when the signature is shown not to be yours.

I don't really understand why your bank is being such poopyheads about it. They're not out any money; the merchants are going to be the ones to eat it (it's in their card processing agreement). Maybe it will teach them to start checking the @#$! signature like they're supposed to.
posted by kindall at 9:42 AM on June 11, 2005

the merchants are going to be the ones to eat it (it's in their card processing agreement). Maybe it will teach them to start checking the @#$! signature like they're supposed to.

Well, if they did actually check the signature like they were supposed to, then the bank or Visa would be out the money. Of course, how often do merchants actually do that?
posted by grouse at 9:57 AM on June 11, 2005

Well, if they did actually check the signature like they were supposed to, then the bank or Visa would be out the money.

No, if they did check the signature, they wouldn't have put the sale through and nobody would be out any money.

The most amazing thing that ever happened to me was when I went to buy some computer books at a Barnes and Noble with my boss's credit card. It might have been a company card, I don't remember. The cashier looked at my signature. She looked at the back of the card. She looked at my signature. She looked at the back of the card. "These don't match," she observed. "He sent me down here to get these books," I countered. She looked at my signature. She looked at the back of the card. I was about to get out a business card so she could at least see I worked for the company in question (yeah, it must have been a company card) when she said, "Oh well, I guess I have to take your word for it" and handed me the card back. That was pretty scary, really.
posted by kindall at 10:15 AM on June 11, 2005

Demand copies of the signed receipts for all those purchases

Generally as part of a card fraud investigation, your bank is going to do this. The law that they are referring to/using as a basis for their policy is Federal Regulation E. It's worth it to read it.

Depending on how you feel about it, I would say that cancelling your debit card is a little extreme, particularly if you enjoy the convenience of the item. I'm not trying to be preachy here, but the one of the best deterrents to fraud is to check your account every day. If you'd known on the first day that weird stuff started happening, you would have been ahead of the game in stopping it. Secondly, your bank just sucks. The debit card is less of a problem than your bank. Even Beast of America (as pointed out above) does better than that.
posted by Medieval Maven at 10:43 AM on June 11, 2005

Cancel your direct deposit and call it a lesson learned. Direct deposit is a tool of Satan.

Perhaps I'm missing something but how is direct deposit a problem here? And why is it bad in general?
posted by advil at 11:06 AM on June 11, 2005

Credit unions, especially new branches, have always treated me well. Big banks are the institutional equivalent of "Bert" in "The Hustler."

posted by mecran01 at 12:59 PM on June 11, 2005

Please tell me this wasn't with Frost Bank; I've continued to use them even though I moved from Austin to Houston, and have never had anything but excellent service from them...
posted by mrbill at 6:02 PM on June 11, 2005

Best answer: This is coffemate's boyfriend. I am a bank employee who works in a branch.

One thing to point out is that even at huge banks every branch can be a little bit different. Bankers in branches deal with people who overdraw their accounts, knowing full well that they are going to get a huge fee, and then walk into the branch and try to convince the bank that it wasn't their fault. I've seen accounts where people get an average of 10 overdrafts every month for the last 12 months. Some people will file a reg E claim (which is what you filed) even though they were the ones who overdrafted their account, and after a couple of days the merchant produces a signed authorization and, wouldn't you know it, the signatures match exactly. I'm not saying that the suspicion you felt from the assistant branch manager was founded, but this practice may explain that manager's lack of sympathy towards you. One thing that may help is simply going to a different branch of your bank.

The other problem has to do with the provisional credit. After 10 business days, the credit must be issued per regulation E. It isn't the branch that issues that credit - they are out of the loop once they help you file your claim. Banks simply don't like to give branch employees that much power over customer accounts. The bank's fraud department issues credit, so no matter how hard you push the branch manager, he or she does not typically have the authority to issue you credit.

The point was made earlier about monitoring your account online, and I wholeheartedly agree with that advice. Industry wide, among customers who have some fraud on their account, people will lose an average of $2500 before they catch anything. Customers who view their account online lose an average of $500 before getting wise. The biggest problem with your situation is that the investigation takes time and you simply don't have enough money to live on. This may sound harsh but what would you do if you suddenly lost your job? You should consider having some kind of contingency plan in place in case of this kind of situation, whether that is a credit card, overdraft protection or just living as cheaply as you can for a few months so that you get some backup money saved.

Ok, now for some good news. Most of the delay in processing your claim is coming from the merchants where your card was used. The way it works is, the bank demands proof that you authorized all of transactions that you listed in your claim. That is why they asked for so much information about them. Obviously the signatures on the receipts won't match up and the merchants will pay the bank, at which time the bank will reimburse you, including any fees that resulted from the fraudulent transactions.

Had you been using checks, and lost your checkbook, you could have lost a lot more money before you realized anything was wrong. Your debit card has an individual transaction limit and a daily transaction limit. Because of the nature of checks, there is no daily limit. The other protection you have with a debit card is that there is almost no personal information on the card itself. Checks display your account number, so any fraud committed with checks will necessitate closing that account. You can also bet that the investigation would take longer, as there are no federal regulations that regulate check fraud in the same way that regulation E regulates electronic transactions. Bank policy, and not federal law, determines the appropriate response.

In sum, I'm sorry that you found yourself in this situation. It's not fun. I hope that you take whatever steps you can to prevent this from happening again. I do think, however, that using direct deposit and a debit card can and should still be a part of your future plans. These tools solve more problems than they create.
posted by Coffeemate at 7:17 PM on June 11, 2005

Here's another idea that works pretty well for my wife and I. We have one main checking account with a local bank. Every bill or local shopping trip gets paid with a check or with cash. This primary checking account has the bulk of our money and has no ATM or debit or any other kind of card associated with it.
We then have another checking account with a major national bank. That checking account never has very much money in it, but it has a debit card associated with it. When we go on vacations, or want to buy something off the internet, we dump some cash into the secondary account. (Note that this only really works if you have or can get a checking account that has no fees on low balances.)

It's nice because we keep the advantages of the debit card (being able to travel across the country without trying to get our checks accepted across the country), but at the same time we aren't carrying around a huge liability.
posted by the_W at 12:42 AM on June 12, 2005

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