Check Card Fraud: What You Need to Know

This last week, I became a victim of check card fraud. I still had my physical card, but someone had gotten my check card information and they used it to make fraudulent online purchases. They made so many online purchases within a 24 hour period, my checking account was drained. Thankfully, I regularly monitor by checking account activity, so I caught the fraud the next morning. 

As soon as I saw the fraud activity, I immediately called my bank. I had assumed that after I reported the fraud, the bank would take immediate investigative action to bring the perpetrator to justice. My check card (otherwise called a debit card) has the Visa logo, so I also assumed that I had the same rights and fraud protection as I have with my regular credit cards. I wasn’t—entirely—correct.

For outright fraud (as it was in my case), major credit card companies like Visa and MasterCard do protect check cards like credit cards, so the maximum amount a defrauded person is liable for is $50. Some banks take this one step further and voluntarily offer $0 liability for fraud. However, banks can differ in how they process disputes and fraud claims. Banks can also differ in how they decide whether or not a transaction was actually fraudulent, which could possibly leave the defrauded customer liable for the fraud if a decision isn’t made in their favor. Additionally, banks can differ in how long they take to issue a temporary credit for the fraudulent transactions. Banking regulations require temporary credits to be issued within 10 days of the report of the fraud, but if the criminals cleaned out your checking account, 10 days can be a very long time to wait if you have to pay bills.

If you are a victim of fraud, you should immediately contact your bank to report the crime and to close down your card account so no more fraud can occur. You should also contact the police to file a police report, and this is important for two reasons. First, the only way a criminal can be found is if you file a police report. According to the fraud representative at my bank (a large bank with a national presence), the only thing the bank’s fraud investigation does is determine whether or not fraud occurred so it can decide whether or not you—the customer—should be held liable for the fraud. It does not attempt to find the perpetrator. If you want the criminal caught, you must file a police report. Second, according to the representative at my bank, the police report also demonstrates to the bank you didn’t make the charges yourself and just claimed the charges as fraud to get out of paying. Since the bank is the one who will decide whether or not you will be stuck with the bill for the fraud, this is extremely important. If you catch the fraud soon enough, you can also contact the companies at which the fraud occurred and see if they can stop shipment of the fraudulent orders.  In my case, I was able to stop an $800 order from being shipped out to the criminal, but I wasn’t able to stop them all, unfortunately.

Of course, the best way to combat fraud is to prevent it from ever happening in the first place. For a list of credit card fraud prevention tips from the FBI, click here.

For the best information on debit cards, click here.