If Funds Are Stolen From Your Bank Account, You Might Not Get Your Money Back
Unlike with credit cards, if someone makes a fraudulent purchase with your debit card or withdraws money from your account without authorization, these funds are not automatically recovered if you report it.
Under the Electronic Fund Transfer Act, consumers only have TWO DAYS to report unauthorized charges or transfers. If reported within those two business days, consumers are often only liable up to $50. Following the two-day window, consumers can be liable for up to $500. If a charge or withdrawal is reported 60 days after the fact, one might face unlimited liability.
The bottom line is, if you don’t notify your bank immediately following a fraudulent charge — there’s no guarantee these funds will be returned to your account.
Identity Thieves Are Tricky — They Know How To Get Around Tight Security Measures
In the U.S., banks are designed to be customer-service oriented. Identity thieves take advantage of this by pushing back when a bank teller starts questioning their transaction or asks for more identification when authorizing a withdrawal.
In a consumer-driven marketplace, banks don’t want to lose anyone’s business, so they might skip a verification step if a customer begins to get testy or frustrated.
Oftentimes, hackers already have your personal information — your Social Security number, your bank account logins and passwords, home address, tax statements, etc. — and can bypass these security measures quickly, making the bank think that they are dealing with the person on the account, not a savvy criminal.
It Takes Longer Than You Think To Replace Stolen Funds From Your Account
Even if you do notice fraudulent charges and report them in a reasonable amount of time, your bank still has 10 business days to do an investigation to verify that the funds were actually unauthorized and that the purchase was not made by the account holder.
This may seem like a short period to wait to get your money back, but in fact 11 business days is more than two full weeks! What if someone charged thousands of dollars using your debit card, or emptied your accounts completely — and then you needed that money to pay your bills just a few days later?
Having no available funds — no cash, no checks, no debit card — for even a short time could wreak havoc on your life and your finances.
Online Banking Isn’t as Secure as It Should Be
Depositing funds, cashing checks, transferring money — all these services have been made easier with online banking and save you from having to wait in line for the next teller.
However, many banks’ online systems are still vulnerable to cyber hacks and data breaches. In the U.K., online bank fraud is the fastest-growing area of crime. In the U.S., instances of online bank fraud are also not uncommon.
In addition to a financial institution’s website, mobile banking apps are also vulnerable to attack. Not all smartphones have the same security protection and hackers have been known to install mobile malware to gain access to one’s account via their digital devices.
No Bank Can Fully Protect You From Identity Theft
You may have heard on the news about massive data breaches at major companies like Target, Home Depot, Dairy Queen and many others.
These cyber hacks can increase your risk of identity theft, as one in three people who’ve been impacted by a data breach have also had their identity stolen.
Many people use the same logins, passwords and verification information across multiple accounts. So if a hacker gains access to your personal information via one of these large-scale data breaches, they can then use this to get into your bank account — or open new accounts in your name without you knowing.
In one recent instance, a man in the Chicago area had his identity stolen. In just 11 days — the length of time a bank has to investigate fraud — the thief purchased two cars, accumulated $159,000 in auto loans and severely damaged the victim’s credit.
When the man contacted a bank in Alabama to file a fraud claim, he asked why no one had noticed that much of the information the thief had put down on their application was inaccurate. The banker informed him that if someone requests a loan less than $100,000, loan officers don’t look at the accompanying documentation!
Don’t Let Banks Be Careless With Your Personal Information – Get Covered Today
Banks can only do so much to safeguard your personal information and prevent you from becoming a victim of identity theft.
Your bank will not stop thieves from continuing to use your stolen identity. They will not contact the IRS for you. They will not restore your credit rating. They won’t replace your lost physical documents like your passport, driver’s license or Social Security card.
Don’t wait until you discover a fraudulent charge on your account and have to spend hours of your life trying to repair your finances. LibertyID’s comprehensive Identity Restoration and Recovery Services has you covered in the event of identity theft — and we’ll do more for you than any bank ever will.