Once you realize that your debit card is missing, regardless if it is stolen or just lost, the first step should be to cancel the card by calling the bank that issued it. The liability for a stolen debit card can differ greatly from a traditional credit card. It depends on the length of time between when the card was stolen and when you reported it as such. To effectively handle debit card fraud, American consumers need to understand the difference between debit and credit, know their rights under the law, report the theft and take action to prevent the situation from occurring again.
Like credit cards, debit cards can be used at retail stores, over the phone and for online transactions. When you use a debit card, the funds spent come directly from your bank account. Because of this, a debit card thief can potentially wipe out your entire bank account and rack up additional charges through overdraft fees. Even though this money is likely to be refunded, you could end up temporarily being short on cash or dealing with bounced checks.
If your debit card is stolen, the Electronic Fund Transfer Act (EFTA) protects you. To minimize the damage done to your finances, however, the law requires you take immediate action. Under the EFTA, consumers who report a stolen debit card before it is used are usually not responsible for unauthorized use. If you report the card as stolen within two days, the liability can increase to $50 USD. When the lost is not reported for up to 60 days, you could end up being liable for $500 USD in unsanctioned charges. If you wait longer, you are usually responsible for all charges.
The first step in reporting a stolen debit card is to contact the bank that issued the card. At major banks, staff may be available 24-hours a day to provide emergency assistance. When you call the bank, they may ask for the debit card number and the security code included on the back of the card. To have this information on hand when needed you can make a copy of the front and back of all cards and store in a secure location. You might also want to program the toll-free numbers of all your cards into your cell phone for quick access.
When you open up a new bank account, most banks typically provide informational literature about the new account. This information will usually include the banks policy on lost or stolen debit cards and a toll-free number for assistance. You can store this information with your scanned debit cards and use it to get additional stolen debit card help if necessary.
After reporting a stolen debit card, the bank will likely cancel the card immediately and issue a replacement with a different account number. The Federal Trade Commission also suggests that you send a follow up letter for record keeping. Generally, the letter is just a simple statement that reports on when the fraudulent activity was first noticed and when you reported the card as lost or stolen to your bank.
Once the lost debit card has been reported, keep a watchful eye on your bank account by carefully reviewing your online or monthly statements. If unauthorized transactions appear, contact the bank to get these charges removed and the funds returned.
Debit cards are one of the most convenient ways to manage and spend your money. Unless due diligence is used, however, you could end up on the losing end of a debit card scam. Taking basic precautions such as memorizing you PIN, swiping the card as a credit and limiting use over the phone can provide additional protection against unsanctioned use.