- Your Liability for Unauthorized Transactions
- How to Get a Credit Union Refund for Fraudulent Transactions
- Resources for Reporting Fraud
In 2020, consumers reported more than 4.7 million cases of fraud to the Federal Trade Commission (FTC), accounting for more than $3.3 billion in losses. Since the emergence of COVID-19, there's also been a significant increase in scam activity. The number of losses reported more than doubled from the $1.5 million lost in 2019.
If you've been a victim of fraud and unauthorized charges on your credit union checking or savings account, credit card, or credit union debit card, you may be entitled to a fraud refund. However, different credit unions and credit card companies have different protection policies, so you will want to check with your credit union to make sure.
Government regulations limit your liability for unauthorized transactions, but many credit unions offer additional consumer protections that go beyond government regulations for liability.
Your Liability for Unauthorized Transactions
Whether you can get a credit union refund for a fraudulent transaction depends on the type of transaction and how quickly you report it.
Debit cards are linked directly to your credit union checking/savings accounts, so you're using the money you already have. If someone has fraudulently withdrawn money from your account, the key is to act quickly.
Notify your bank:
- Within 2 days: Your maximum liability is $50.
- After 2 days: Your maximum liability is $500.
In some cases, you can lose everything in your account. For example, waiting 60 days to report a fraudulent charge eliminates your credit union's responsibility. You would be liable for the total amount of all charges with no fraud refund protection.
While you may qualify for a credit union refund, remember that the money has already been removed from your account as soon as the scam happens. This means you will not have access to those funds until your complaint is resolved.
You can think of credit card charges as short-term loans. You are borrowing the money to pay for things with the promise of paying them back when due.
Because the money hasn't been paid from your credit union checking or savings account, many transactions can be reversed without losing money. According to the National Credit Union Administration, a government agency that oversees credit unions, credit card transactions have a liability limit of $50.
You have no liability if you report your credit union credit card loss or theft before any unauthorized charges are made. The Fair Credit Billing Act also says that if you still have physical possession of your card, but your card number is stolen or used in an unauthorized transaction, you are not responsible for any fraudulent charges, so a fraud refund will be issued.
Many credit unions that issue credit cards have zero-liability policies. Also, several major credit card companies have zero-liability policies. For example, these credit cards, typically offered by credit unions, provide $0 liability on unauthorized charges.
- American Express
If an unauthorized transaction from your credit union checking or savings account occurs, you may be entitled to a fraud refund if you contact your credit union as soon as you discover it.
- Within 2 days: Max liability of $50.
- After 2 days: Max liability of $500.
- After 60 days: No protection.
How to Get a Credit Union Refund for Fraudulent Transactions
You should notify your credit union as soon as you notice an unauthorized transaction on your debit card, credit card, or credit union account.
You can call your credit union, send an email, use the credit union online banking or app, or send a letter. The Federal Trade Commission recommends you call and document the claim in writing.
If you still have your debit or credit card, make sure to call the number on the back of the card. Most cards will include a specific number to report fraud. If you do not have possession of your card, you can look up the fraud number online.
Here are the 10 largest credit unions and what you need to know to report an unauthorized transaction.
- Navy Federal Credit Union
- State Employees Credit Union (SECU)
- Schools First Federal Credit Union
- The Golden 1 Credit Union
- America First Credit Union
- Alliant Credit Union
- First Technology Federal Credit Union
- Randolph-Brooks Federal Credit Union
Resources for Reporting Fraud
The National Consumer Law Center (NCLC) also recommends filing a police report for any unauthorized scams resulting in unauthorized charges on your account. This can help provide documentation to support any fraud claims on your credit union account and help you put a credit freeze on your credit report.
You should also consider filing a report with these agencies. This information may help support your claim and help other consumers from becoming victims:
- Federal Trade Commission Fraud Center
- The FBI Internet Crime Complaint Center (IC3) for internet-related scams
- The Consumer Financial Protection Bureau (CFPB)
- Your state's Attorney General's office
You should also contact the three major credit bureaus when you've been scammed, had your identity stolen, or credit union account information has been compromised. You can look for any unauthorized inquiries from financial institutions or creditors by checking your credit report. For example, when scammers get your account information, they may try to open up new accounts in your name. You would be able to see such inquiries on your credit report.
Depending on how much protection you want to put in place, you can choose between a fraud alert or a credit freeze.
- Fraud Alert: A fraud alert lets companies know they need to verify your identity before opening any new credit in your name. Fraud alerts are free at each credit reporting agency and last one year once you've placed them. Once you contact one of the credit bureaus, they are required by law to contact the other two.
- Credit Freeze: A credit freeze limits access to your credit report so that nobody can open any new credit accounts until the freeze is removed. A credit freeze is also free, but you will need to contact each of the credit bureaus separately to initiate a credit freeze.