Debit card fraud happens all the time. You’re at Chick-fil-A about to buy a Spicy Sandwich Combo and your card – which should have at least $700 on it – is declined. WTH? So you call your bank and find out that somehow there’s hundreds of dollars missing from your account. Your account may have been hacked, or maybe a debit card was stolen. Or a professional identity thief could have created a counterfeit card using your account information.
Regardless of how it happened, you have rights. The first thing you need to do is dispute the unauthorized charges. Under the Electronic Fund Transfers Act, the bank is required to honor an oral dispute, but they can request that you confirm the details of your dispute in writing. I recommend that you skip the oral dispute and go straight to a written dispute. Just write a simple letter identifying yourself and the account number and list each fraudulent transaction. Then, request a refund for the sum total of all fraudulent charges.
The bank then has 10 days to refund your money. They are required to conduct a bona fide investigation into your dispute. If they can’t complete the dispute investigation within 10 days, they are required to provisionally put the money back into your account while the finish their investigation. At the end of which time, they will either take the money back (if they determine that no fraud occurred), or leave it there.
If the bank fails to conduct a bona fide investigation or just makes the wrong conclusion, you can take them to federal court. If you win, they have to pay you all the money that was wrongfully taken, plus a statutory penalty of up to $1,000, plus costs and attorneys’ fees. 15 U.S.C. 1693m.
If you can show that the bank had no reasonable basis for rejecting your dispute, or that they just willfully rejected your dispute without regard to the evidence available to them, they can be held liable for treble damages – meaning that they have to pay you back three times what was fraudulently taken from you. Plus court costs and lawyers’ fees.
Finally, a pro tip for handling your first unauthorized use situation: FILE A POLICE REPORT, and show it to the bank. It isn’t explicitly required under the EFTA, but it sure does help. For one thing, the bank is more likely to take you seriously if you’ve referred the matter to law enforcement, so you may not even need a lawyer. But if they still reject your dispute even after seeing the police report, it makes them look a lot dumber for rejecting your dispute.
Also, the police investigation may uncover the identity of the person who stole your card or information, which can entitle you to criminal restitution or at least a case under the Alabama Consumer Identity Protection Act.
I love Electronic Fund Transfers Act cases. I’ve handled lots of them, so if you need help with a debit card fraud case, give my office a call. 251.272.9148.