Scammers can be relentless and very convincing. Whether they call, text, or email, scammers use sophisticated schemes to get your personal information, such as bank account numbers, credit card numbers, or Social Security numbers. If you are the victim of a scam, give out personal data that might be used to scam you, or if a scammer gains access to your phone, computer, or bank account, reach out to your bank and/or credit card company immediately.
If you have been scammed, you may be able to get a fraud refund from your financial institution. Regulation E of the Electronic Fund Transfer Act (EFTA) provides some consumer protection in case of scams involving electronic funds transfers and debit cards. Bank credit cards are governed by the Fair Credit Billing Act (FCBA).
Not all banks offer the same protections, however. Many will go beyond what they are required to do by law. For example, the FCBA puts liability limits at $50 for credit card scams, but many financial institutions offer credit cards with zero liability.
You should check with your bank to see how they handle scams involving electronic fund transfers, debit cards, and credit cards.
Limits of Liability for Scams
You may not be able to recover all of the money involved in a scam; however, these government regulations in the U.S. do limit your liability.
Electronic Funds Transfers
If you are the victim of an unauthorized electronic fund transfer involving your bank account, your liability in case of a scam is limited if you contact your bank promptly.
The timely notice provision says if you alert the bank within two business days after the scam occurs, your liability will not exceed $50. If you contact your financial institution more than two days after learning of the loss, your liability will grow to $500.
So contact your bank as soon as you learn of a scam. If you do it within two days, the most you stand to lose is $50. If you wait, you might be liable for the first $500 of any loss.
Make sure you review your monthly statements as well. If you notice an unauthorized electronic transfer on your statement, you have 60 days to report it, or you risk losing protection against future transfers. After 60 days, you might lose any opportunity for a bank refund and possibly lose everything in your account.
- 2 days: Be liable for a max of $50.
- After 2 days: Be liable for a max of $500.
- After 60 days: Be liable for all money lost.
Debit cards work the same way. Through the EFTA, your liability is limited to:
- $50 if you report fraudulent transactions or a lost or stolen card within two days.
- $500 if you report fraudulent transactions or a lost or stolen card within 60 days.
- After 60 days, no protection is given.
If you lose your debit card or it is stolen, you will have no liability for fraudulent charges if you report it before an unauthorized transaction takes place.
When there’s a fraudulent transaction on your debit card, the money is moved from your bank account to the scammer. Even if you can eventually recover some of the money, the money is gone from your account until it’s resolved. This can cause additional problems as legitimate charges get declined or cause overdrafts.
A credit card works differently, however, since a charge doesn’t take money from your account.
The FCBA governs fraudulent charges on your credit cards. The limit of your liability for scams using your credit card is capped at $50. If you report your credit card as lost or stolen or feel your account has been compromised and report it before any fraudulent activity occurs, your liability is zero.
Check the terms on your credit card. Many bank credit card issuers have zero liability for all fraudulent transactions.
How Do You Dispute Fraudulent Transactions?
You can dispute fraudulent transactions by contacting your financial institution.
For credit or debit cards, look on the back of your card for the phone number for fraud refund protection and call them. Most card issuers have 24-hour hotlines to report fraud. You can also report fraud online if your bank has an app or online banking or send a letter to the bank detailing the scam.
Make sure you are calling the bank or credit card company. Scammers also set up fake call centers, which they use to gain even more information to scam you.
Lost or Stolen Cards
If you’ve lost your debit or credit card, call your local bank branch. The bank will cancel your card and issue you a replacement with a new card number in most cases. Your account number should remain the same, however.
If a scammer withdraws money from your bank account, contact the bank as soon as possible by phone. Once you report an unauthorized transaction, your bank has 10 days to investigate and report back to you.
If the scam involves a merchant, such as paying for goods or services that were not provided, you should first contact the merchant. The merchant may refund your purchase if they are legitimate companies, although scammers may be long gone by the time you realize you’ve been scammed.
Report Bank Fraud
You should also report scams to organizations. This not only helps document the fraud in case you need to provide more information to your bank, but it may also prevent others from becoming victims.
The non-profit National Consumer Law Center (NCLC) recommends you contact:
- Your bank and/or card issuer
- The police
- The Federal Trade Commission Fraud Report Center
- The FBI Internet Crime Complaint Center (IC3) for internet-related scams
- The Consumer Financial Protection Bureau (CFPB)
- Your state’s Attorney General office
You should also report fraud to the three major credit bureaus. Scammers with your account information or other personally identifiable information may attempt to open up additional accounts in your name.
P.O. Box 105069
Atlanta, GA 30349
P: (800) 525-6285
P.O. Box 2002
Allen, TX 75013
P: (888) 397-3742
P.O. Box 1000
Chester, PA 19022
P: (800) 680-7289
You can place a fraud alert on your account, which notifies any creditors that they should take extra steps to confirm your identity before opening new accounts or extending credit. You may also choose to freeze your credit, which restricts access to your credit report to prevent anyone from opening up new accounts.