Our fourth installment of the Identity Theft series will focus on what to do when your bank information has been stolen. As an identity theft victim, you have protections under federal law for ATM or debit card transactions, but not if a thief forges your signature on a check or uses you account number to buy something over the phone. Most states will hold banks responsible for losses from forged signatures of checks or other fraudulent transactions on your checking account. However, banks do expect their customers to take reasonable care with their account information, so you should report fraudulent activity quickly.
ATM and Debit Cards
Federal law limits your liability for the unauthorized electronic transfer of funds that result from identity theft. It's best to act as soon as you discover a withdrawal or purchase you didn't make or authorize. Many card issuers have voluntarily agreed that an account holder will not owe more than $50 for transactions made with a lost or stolen ATM or debit card. However, under the law, the amount you can lose depends on HOW QUICKLY you report the loss. If you don't report within 60 days of the day your institution sent you the account statement showing the unauthorized withdrawals, you could lose all the money an identity thief took from your account.
When reporting fraudulent transactions, you will want to contact your ATM or debit card issuer first to report the fraudulent transactions. Next, you should write a follow up letter to confirm that you reported the problem, keeping a copy for your records and sending it by certified mail and getting a return receipt on it. Lastly, update your files with the dates of the calls you made and/or the letters you sent.
If you report a lost or stolen ATM or debit card before any unauthorized purchases are made, you will have zero liability for fraudulent charges. The maximum loss that you can incur if you report the loss or theft within 2 days in $50, but if you wait more than 2 business days after you learn about the loss or theft, your liability can be up to $500.
In most cases, the financial institution has 10 business days to investigate your report of a fraudulent transaction. It must tell you the results within 3 days of finishing the investigation and fix an error within 1 business day of finding it. In some cases, it can take up to 45 days to finish the investigation.
Whether a thief has stolen your paper checks, misused the account number on the bottom of your check, or opened a new account in your name, you should contact you bank or financial institution and ask them to close the account as soon as possible.
There are two ways to report stolen checks. First, you can contact your financial institution and ask it to stop payment on stolen checks and close your account as well as report the theft to its check verification system. Or you could contact the check verification companies directly and report that your checks were stolen and ask them to tell businesses to refuse the stolen checks. Here are the phone numbers to the check verification companies:
- Telecheck: 1-800-710-9898
- Certegy, Inc.: 1-800-437-5120
If you need to report a fraudulent account opened in your name, you will need to contact ChexSystems, Inc., to request a free ChexSystems report.
ChexSystems, Inc.: 1-800-428-9623 or www.consumerdebit.com
Once you have received your report from ChexSystems, you will need to contact every financial institution where a new account was opened and ask the financial institution to close the account.
If a business rejects your check, you can politely ask the business for an explanation. The business must tell you what information it used to decide to reject the check. If a thief writes "hot" or NSF checks in you name, you should contact the business that took the bad check and explain that you are a victim of identity theft before they start collection action against you.
Finally, if you are working with a bank or financial institution to resolve identity theft related problems and need help, contact the agency that oversees the bank or financial institution. You can go to www.ffiex.gov/consumercenter to find out which agency to contact.
As always, keeping good records of all calls and letters to and from the various companies that you will have to deal with is crucial to resolving your identity theft, and keeping the theft from happening again or causing you further anguish in the future. You can find help and tips at www.ftc.gov/idtheft.
The information in this post in based on the FTC's "Taking Charge" booklet.