Being a victim of fraud can be very damaging to your finances, especially if it involves a debit card. But it’s also normal.
A Federal Reserve Financial Services fraud survey published in April found that credit card fraud is the most commonly reported form of payment fraud by financial institutions, with 75% of institutions reporting attempts. They estimate that payment fraud accounts for 40% of their total losses, which is up 4% year over year. Here’s what you need to know to protect your money.
What is the 60 day debit card fraud limit?
Under federal consumer protection laws, you generally must report unauthorized activity that appears on your statement within 60 days of receiving the statement. If you are not, you may be responsible for finding other jobs.
The 60-day countdown starts when the bank sends the statement, not when you first see fraudulent activity. If you don’t regularly review your bank statements, you risk missing unauthorized payments. However, the rules are very simple if your bank card is stolen. Under that scenario, you only have two business days to report the card as lost or stolen to limit your unauthorized transfer liability to $50. If you report the card stolen after two days but before the 60 days are up, you may be liable for $500.
After that, you may be liable for additional unauthorized transactions, although most banks offer comprehensive liability protection today.
Why debit card fraud can hurt more than credit card fraud
Credit and debit cardholders can both face fraud, but it can be a challenge for debit cardholders to protect their money. Credit cards offer a wide range of protection and do not include personal expenses. If you report fraudulent credit card activity, you’ll usually get a refund faster than if you did that fraudulent activity on a debit card.
Losing money on a fraudulent debit card also reduces your savings. That can affect a person’s ability to pay rent, groceries and other essentials.
Credit card fraud doesn’t affect your checking account balance, meaning you can still keep up with important expenses without risking overdraft fees.
How to protect yourself before and after fraud
Preventive measures are the best way to deal with fraudulent transactions. If you don’t do anything, you don’t have to deal with the headache of contacting your bank and making sure you’re being topped up correctly.
Reviewing bank statements every month allows you to spot any fraudulent transactions early, and real-time debit card alerts for purchases and withdrawals allow you to respond more quickly. You should immediately report any suspicious activity through your bank’s official app, website, or phone number. You should also file reports with the Federal Trade Commission (FTC) about fraud or identity theft when appropriate.
If you see fraudulent transactions, suspend or block your card to ensure these transactions don’t stack. Self-assessment can help, but you can avoid some red flags. Peer-to-peer payment apps and recurring debit card payments that you don’t realize can lead to fraud if you’re not careful.
