Debit card theft occurs when someone takes the debit card, or the debit card information, of another person in order to access the contents of their bank account. If the thief already has the person’s other information because for instance, they stole their wallet, it will be even easier for them to use a person’s debit card. And, of course, debit or credit card theft can lead to identity theft as well.
If a person’s debit, ATM, or credit card is lost or stolen, federal law limits the person’s liability for charges made without their permission. The bank or other financial institution that issued the card has to take the loss, or some of it, but this protection depends on the kind of card it is and when the loss is reported.
The Fair Credit Billing Act and the Electronic Fund Transfer Act are the two main federal laws that deal with debit and credit card theft or loss. They offer protection from liability to the cardholder, but only if the person whose card is lost or stolen reports it to the financial institution that issued the card as soon as possible. The person should call or use the bank’s mobile app to report the loss or theft.
Under federal law the person is not responsible to pay for charges or withdrawals made without their permission if they occur after the person reports the loss. If a person does not report the loss or theft until after someone has used the card without permission, the person may have to pay some or all of those charges.
However, many banks, credit unions and other card issuers offer protection and will absorb the loss. A person should check with the issuers of their cards and ask them what their policy is regarding charges made without the card holder’s permission. Another option a person has is to check with the company that provides them with homeowner’s or renter’s insurance. A person can ask if their insurer covers them for card thefts. If not, a person should ask their insurance company to include this protection in their policy.
In any event, a person should check their account statements or their online account for the number to call in the event of loss or theft. They should also keep a close watch on their accounts for activity and call the bank or credit union if they see charges they do not recognize as their own.
A person may want to keep the customer service numbers for their bank or credit union close at hand in case they need to use them.
Then, in addition to calling, a person should follow up promptly in writing. They should send a letter to the card issuer and include their account number, the date and time when they first noticed that they did not have their card, and when they first reported the loss. A person should keep a copy of the letter and notes of calls with the bank or credit union, including the date and time of the call and the employee with whom the person spoke. Send a letter to the address used for billing disputes involving credit cards or errors involving debit cards.
Again, if a person reports the loss or theft of a debit card before it is used without the person’s authorization, they would not be liable for any charges. If a person reports the loss or theft of a debit card within 2 business days of learning of the loss or theft, they are liable for up to $50 of unauthorized charges or withdrawals. If a person waits for more than 2 business days after learning about the loss or theft to report it, but does so within 60 calendar days after their statement is sent to them, their liability for unauthorized use is limited to $500.
If a person does not report a theft or loss for over 60 calendar days after their statement is sent to them, then they are going to be liable for all the money taken from their debit card account, and possibly more, e.g. money taken from any account linked to their debit card. So, again, it pays for a person to monitor their accounts and act swiftly if unauthorized charges appear.