What To Do In Case of Debit Card Fraud
Debit cards have become instrumental in accelerating modern finances. Consumers like you can pay for products and services without having to carry a lot of cash. Meanwhile, merchants no longer have to worry about finding change and counterfeit bills.
However, there are instances where the numbers don’t add up. When an unauthorized transaction happens on your account, most people ask, “Can I dispute a charge on my debit card?” or “Is there anything I can do?” The good news is that the law protects your interests, although you are also expected to do your share. This article will walk you through it.
Despite the convenience it offers, debit card holders should still use it with caution. However, should the unthinkable happen, here’s everything you need to know about debit card fraud and what you can do to dispute charges on debit cards.
What is Debit Card Fraud?
Debit card fraud happens when an unauthorized person tampers with your bank-issued debit card, steals information from it, or conducts transactions without your knowledge. Most cases take the form of online or in-store purchases, an ATM cash withdrawal, or an online transfer. The common factor is that the data stored in the debit card is used without the owner’s consent.
How Someone Can Commit Debit Card Fraud
Before, the only way to commit debit card fraud was by stealing someone’s card, including the PIN code in most cases. Some people shoulder surf the prospective victim or guess the password based on personal information such as birthdays and addresses. Another old-school method is by stealing bank statements sent by mail, usually attempting to change the mailing address and avail of a new debit card for unlawful use.
As technology advances, however, so do the people with ill intent. A common strategy is called skimming, which basically copies the information from your card. They only need a few seconds with your card, scan it, and return it to you like nothing happened.
Once the account owner has found out that there are unauthorized transactions, that’s when they start to dispute debit card charges on their account.
Protect Yourself from Debit Card Fraud
Reporting Debit Card Fraud
To dispute debit card transactions, the first thing to do is to call your bank. The bank should be informed, ideally within two business days. The US government, through the Office of the Comptroller, also strongly recommends contacting the local police or FBI offices.
The issuing bank will follow this up with an independent investigation. Once reported, the immediate response of the bank is to freeze your account. Usually, this can last from a few days to several weeks, depending on the financial institution.
If the financial institution determines that fraud was indeed committed, the funds might be returned and your account unfrozen.
How to Dispute a Debit Card Transaction
A debit card dispute, also known as a chargeback, occurs when a consumer believes that a transaction occurred without the owner’s consent, approval, or knowledge. After filing a debit card transaction dispute, some banks temporarily refund the disputed amount pending an investigation. Once the dispute is considered valid, the transaction is considered void.
What Happens if Your Dispute is Denied?
After a bank’s investigation, there may be various reasons for the denial of a dispute charge on a debit card. It may be caused by the consumer’s non-compliance with the procedure, providing incorrect information, or that the debit card issuer hasn’t found any evidence that the debit card dispute is actually unauthorized.
In most cases, debit card issuers respond to your debit card transaction dispute with an explanation of why your request was approved or denied. If the result did not go your way, there’s always something else you can do.
Types of Damages Available to You
You can file a lawsuit to continue pursuing your denied debit card dispute. Usually, financial institutions have an arbitration clause, which essentially states that instead of taking them to court, you should to an arbitrator first. Banks do this to settle an escalating dispute immediately.
Attorney’s Fees and Costs
To protect consumers, Congress has passed the Electronic Fund Transfer Act (EFTA), which contains provisions that require banks to do the right thing and address customer disputes fairly and diligently.
Among its provisions is that should a consumer file for a lawsuit and win the case, the bank is also liable for your attorney’s fees. This encourages lawyers to take up consumer cases, even in situations where paying the lawyer outright isn’t worth it. Consider this case: a $200 dispute doesn’t look worth pursuing if it entails legal representation that costs over $300 an hour.
With the EFTA provisions, say you incurred $5,000 in lawyer’s fees and you win your $200 dispute, the bank will be paying both amounts to the respective parties. By posing these risks to the banks, they are then persuaded to settle instead, especially if they know that their cases won’t hold.
Additionally, consumers like you might be entitled to statutory damage. This refers to additional compensation aside from those mentioned above. To further discourage unfair practices among banks, this provision lets consumers file claims for the additional inconveniences they had to go through because of the dispute.
Contact an Experienced Debit Card Fraud Lawyer
Although debit cards have become valuable financial tools, it’s still worth remembering that their benefits also come with risks. Should an unfortunate case of fraud happen to your debit card, there are still a couple of things you can do. After all, you have trusted banks with your money and it’s their responsibility to help protect your interests. Even then, the government has put additional safeguards all in the name of consumer rights. Knowing these things can help you better protect your hard-earned money.
The qualified attorneys at DebitCardLawyer.com can help you get your money back plus damages. Contact us today.