6 Things To Do Now To Prepare for When Debit Card Fraud Happens To You.

  1. Instead, protect yourself and your family before the inevitable strikes with these six steps that you can take to keep things calm and on track while you wait to get your account and money restored.
Photo by CardMapr on Unsplash

It can happen to anyone, anywhere at anytime. It doesn’t matter if you are wealthy and have hundreds of thousands in your account or if you are on a fixed income, if you have a debit card you are at risk. Pretty much everyone is susceptible to fraud occurring on their checking account.

Security.org’s annual report for 2021 shows that nearly 127 million people or half of American adults have had at least one fraudulent charge on a debit or credit card. Credit and debit card fraud is a multibillion dollar industry and is only getting worse. While there are steps you can take to help prevent or reduce the probability of it happening to one or more of your accounts, there’s isn’t anything anyone can do to completely eliminate the risk.

Websites and email are at risk of being hacked, an unscrupulous waiter or waitress may copy your card information to sell or use, you may unknowingly use your card at an ATM or gas station pump that’s has a skimmer. You might do all the things to try and keep your information private, but there is an ever evolving list of ways that criminals can access your card information and once they do it can create a whole host of problems for you if you aren’t prepared.

In our age of modern technology our lives can be deeply impacted if we suddenly don’t have access to our money. You may find yourself at the store unable to get groceries, or at the gas station on E but your card is declined. What if it’s the last day to pay your electric or gas bill before it gets shut off, Maybe you work from home and can’t pay your internet bill. Without internet you can’t work and then your job is at risk. What if rent is due and your account is without funds for a week or two, will you landlord believe you and be patient while you wait for the funds to be returned?

All scary stuff that should not be left to chance.56

Instead, protect yourself and your family before the inevitable strikes with these six steps that you can take to keep things calm and on track while you wait to get your account and money restored.

  1. Make sure that you have at least TWO checking accounts at separate banks so at least some of your money is always accessible.

One account may get hit by fraud, but two separate accounts are unlikely to both get hit at the same time, especially when you keep those accounts at different banks. Shop around and find a bank that will work best for you. Chime and Ally are popular banks for people that don’t want to go into a branch or banks like Chase usually have promotional deals every so often where you can get a cash bonus for opening an account with a minimum deposit. Cash app and Venmo have some neat features now or if you really want to get creative and have fun, look into crypto wallets that have debit cards you can order like the Coinbase debit card.

Just make sure that you use the accounts in a way that makes sense to you and makes your life easier, not harder. Maybe you can keep one account for bills to come out of and one for discretionary spending or investing. Some people setup a separate account that is just for holiday spending so they can shop online at anytime. It’s really a great way to both save money for holiday gifts and also give you the peace of mind of an emergency fund. You’re taking care of two birds with one stone.

2. Know what your daily allowed spending limit is and don’t set it higher than you need to.

It’s called a point of sale limit and every checking account has a limit to how much the account holder can spend in a single 24 hour period. This limit may be $1000 or $3000. Each bank and each account is a different. Knowing what your limit is and setting it at an appropriate amount might just help keep criminals from completely draining your account.

If you know that you will never have more than $3,000 at a time in your account and your highest bills are under $1,000 then you don’t have a need to set your point of sale limit at $3,000. Setting it at a lower amount can protect your account during those times where you have a higher amount of funds like the first few days after pay day when you have yet to pay all of your bills.

3. Keep emergency cash around.

You never want to be in a situation where you need gas and can’t buy it or you have to pay your electric bill or they will shut your power off. Luckily cold hard cash is immune from checking account fraud and it’s almost always accepted, so you can still get what you need and pay critical bills even during an emergency. If your card gets frozen or you have to wait for a few days to get a new one then having some cash at home in a locked safe or a well hidden spot may save you from quite a bit of grief.

Some people even hide a little emergency cash in their wallet or in a secret spot in their car so they are never stuck without access to money. Just make sure that you pick a safe place to keep your cash and you keep it a secret. Physical cash may be protected from debit card fraud but it’s still at risk of going missing if anyone around you is suffering from sticky finger syndrome.

4. Know your banks options and if available set up text or email notifications for anytime your card is used.

The faster you can alert your bank when fraudulent charges happen the quicker they can respond and stop new charges from coming through. Many times criminals will hit your account with a small charge first, maybe just $10 and once that goes through they will start trying bigger and bigger charges trying to get as many charges approved as fast as they can. Knowing every time your debit card is used allows you to notice the fraud immediately and may be the difference between losing $10 and losing $1000. It only takes a few minutes for your entire account to be emptied. In this case knowledge really is power.

5. Check your account frequently and know your banks fraud policy

Sometimes fraud happens so quickly that your entire account is emptied in mere minutes and sometimes it isn’t massive or super obvious. Sometimes fraud happens slowly over a long period of time. The idea is that a smaller amount is taken on a repeated schedule with the hope that the account holder won’t notice it or won’t care. However, these repeated small deductions can seem harmless one at a time but they can add up fast. By time you realize how much is gone it may be too late to do anything about it. If you don’t catch the fraud and report it within a certain time frame you may not be able to get your money back at all. Knowing exactly what the policy says and how much time you have may make the difference between getting all, some or none of your money replaced.

6. Pick your bank wisely and make sure you have a bank that supports you

Not all banks are created equal. While it’s true that just about every bank will refund fraudulent charges it’s not always a quick or easy process. Some banks have really great fraud protection services and will jump through hoops to quickly return your money and issue you a new, secure debit card. Other banks may not be quite so accommodating. Sometimes you have to fight the bank and work hard to prove that the charges were unauthorized. If your card is stolen it may be even harder to prove it wasn’t you that used the card and may require quite a bit of patience before your account is restored.

There are some banks that will have no issue giving you back your funds on a sort of credit while you wait for everything to get sorted no matter who you are or what kind of customer you are. Then there are banks that are only willing to quickly assist those high value customers that they trust and want to be sure to keep their business. Everyone else can wait. Then there’s those banks that will always drag their feet. No matter who you are, you will have to wait to get a single cent back.

My husband is a great example of this. He has built a career in banking over the last twelve years and he holds a vice president position at the bank he both works for and banks at. Despite his title and position he still didn’t get the funds replaced in our account for several days the last time we experienced fraud. Our entire account was drained by time the fraud department froze the card and we had to go for days without any access to our account or money.

When you are clear on exactly what your banks policy regarding fraud is you will put yourself in an infinitely better position for when the unavoidable eventually finds you. Never assume that you will get all of your money back no matter what or on the same day that you report it. Sorting out fraud can be tricky and may take time so put yourself in a position that allows you to be patient.

Remember that every bank will have a different method for how they handle fraud but a mark of a good bank isn’t just how they treat you when everything is going well, but how they treat you when something goes wrong. There are plenty of banks out there that will treat you well and provide you with fantastic customer service. Banks are businesses after all and if their policies aren’t favorable and don’t make you feel secure than take your money elsewhere.

Most importantly resist the urge to be naive and wing it or you may end up in quite a precarious financial situation. Going without access to your funds for even a few days let alone a few weeks can significantly alter you life, so prepare for the worst now to prevent catastrophe later.