Slashdot Mirror
Dealing with Internet Credit Card Fraud?
Where's My CreditCard asks: "Recently There has been a large increase in the amount of press relating to identity theft and the related crimes. I have recently been subject to several fraudulent transactions on my credit card and debit card through the internet. It has been over a month and my bank is still stringing me along saying it will take up to 10 weeks to get my money back. What have other on Slashdot done in this type of situation. What is the best way to keep things moving forward?"
My answer has been to never use my debit card on the internet. Why give out something that provides instant access to your bank account, when a credit card should always be sufficient? Credit cards put the primary risk on the credit issuer, not on your bank account.
Check out your bank's Reg E disclosure - if you catch fraudulent activity in a timely manner, your liability is also limited to $50 for the debit card.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
This happened to me about 4 years ago...
I had a bogus $400 charge show up on my checking account debit card. I saw the charge almost immediately (about two days after it happened) because I routinely monitor my checking account from online daily. I contacted the bank and the police. The police told me that they couldn't take the report unless the bank initiated it. The bank said they would start an investigation, which they did. In the meantime, they put $400 back in my account.
My statement to the bank was as follows:
My debit card has never been missing
My debit card has never been used by anyone other than myself
No one else knows my pin number (not even my wife)
I had never used the ATM where the charge was recorded (the bank sent me a statement from some third party bank showing the address of the ATM and the transactions that had been attempted. There were 8 tries late at night for different amounts, starting at $1100 and going down until the $400 transaction worked).
About 4 months later (after bugging them about once a week to find out what was going on), the bank came back and said the transaction was valid because a debit card had been used to make the transaction and so they were taking their $400 back. This is actually what they said, even after I had told them that I had not used my card for the transaction and the pattern of transactions obviously showed that someone was fishing for an amount that would be accepted.
As far as the bank was concerned, case closed. Fortunately for me, I had the foresight to marry a lawyer. Being a personal injury attorney, my wife was somewhat familiar with the rules the bank had to follow in a situation like this and luckily for us one of their duties was to perform a timely investigation, which had been defined in our area of the world as within 45 days. So, only because they took so long we were able to make them hand us back the $400.
However, in the course of our investigation, we learned a number of things I found quite fascinating. First, we found out many (if not most) ATM cameras are no longer maintained. So, a lot of the time there is no visual record of who is using the ATM machine. Second, the bank didn't consider the pattern of tries to be significant, as they felt it was only an attempt by me to fool them into thinking it was someone else(and obviously ignoring the fact that by the same logic if I was trying to defraud them, I would have also said my card had been stolen or lost). Third, the only place I had EVER used my pin prior to this transaction was at the local grocery store. I mean EVER. I am very careful about where I use my pin and up to that point I had only ever used it at the local grocery store (I had never even used it at the bank's ATMs). This probably means someone at the store saw me enter the pin (probably using the store's surveillance cameras) and had enough access to my bank's debit card information to create a new card using my account number and pin. This last part is speculation but I don't know of any other way they could have used a real debit card to make the withdrawal. Unless, of course the bank was lying to us and their computers had been hacked (but in that case, why the multiple tries?). In any case, we concluded something out of our control was wrong at the grocery store and/or the bank, so we stopped using the store and changed banks.
Since then, we keep two checking accounts at our current bank: One for the money and one for the debit card. We keep a minimum balance for day-to-day purchases (gas, food, etc.) in the debit card account and we plan big purchases and ALL online purchases in advance by transferring the money from the money account to cover the purchase right before we make it. At least that way the debit card has a lowered risk because the balance is always very low and the other account is only accessed through the bank's computer. Yes, I know it isn't perfect, but it is better than having all of our cash exposed.
The NSA: The only part of the US government that actually listens.