How to handle debit and credit card fraud

Credit Cards pile

Mobile banking may make it easy for you to complete purchases online and in store, but modern technology can also make you more susceptible to frauds and scams. Even when you think you’re being careful, the smallest decisions can put you and your money in danger. If you believe you have been a victim of fraud, here’s our tips on how to go about reporting suspicious activities, and what you can do to prevent it from happening.

Debit or Credit?

It’s important to determine whether it’s your debit or credit account that has been compromised. With credit card transactions, it’s much easier to dispute a charge because companies can check with the merchant to see how and when the charges were made. If the credit was not yet processed, you may still have a chance of retrieving the money.

ATM number pad close up shotDebit cards, however, are a whole other story. Since it works much like cash, once a transaction has bee completed, it’s considered paid for unless you argue with a merchant on a refund. Imagine trying to refund cash in a store without a receipt or telling the cashier someone stole your money and bought something here with it. The chances of getting that money back are quite slim.

Thankfully, most banks have a zero liability program for debit cards if you report fraudulent activity sooner than later. By reporting it within two days of the transaction, you may be liable for up to $50 for the charges. If reported before 60 days, the charge bumps up to $500. It’s an annoying price to pay, but if you’ve been scammed out of more than thousands of dollars, it’s still worth it to get anything back at all.

Reporting fraud

Most major banks have mobile apps for you to keep track of your expenses on the go. It may be wise to check up on your account every so often to see that nothing fishy is going on. The app will also provide you a customer service phone number or bank locators should you need to report a suspicious activity or lost card. If possible, ask the bank to reissue you a new card or walk into a bank for a temporary card so the old one can be deactivated.

When reporting fraud and filing a dispute, the bank will ask you to fill out an affidavit — a signed statement that verifies you as the authorizer in the investigation process. This means that you mean what you mean and if the bank catches that you’ve lied about a supposed fraudulent charge, you could get into big trouble and even go to jail.

Banks these days often have a system to track your spending activities, so if an unusual purchase occurs, the chance of you winning your fraud investigation is high. It’s also better to provide proofs of your last purchases through receipts to show exactly when you still had your card. We’ll cover these topics in a bit.

If your statements show the merchant where the fraudulent transaction was made, try contacting them directly to get information about the purchase. It’s likely they will tell you to dispute the charges with your bank, but the merchant may have security cameras that show when who performed the transaction. If it’s an online purchase, an investigation can be made to track the shipment of the product to whoever was stealing your money. Of course, this may require you to obtain a subpoena to allow the merchant to release that information.

Keep track of your purchases

If you still prefer to use debit cards over credit cards to avoid paying monthly bills, that’s perfectly alright. But unless you plan to book expensive trips or splurge on a new HDTV, call up your bank to put an amount limit on purchases and withdrawals. This way, if a transaction exceeds what you’d normally spend, the bank will report the activity to you as soon as possible and can even temporarily freeze the account so no further damage is made. Yes, it can get annoying if you choose to make a one-time large withdrawal, but better to be safe than sorry.

Fujitsu S1100 Mobile Portable ScannerIn this day and age, keeping paper receipts is also a bit of a daunting task. Still, you never know when those can come in handy to prove your last authorized purchases to provide a timeline of when you last used your card and when you lost it. Hold onto receipts for up to 90 days before tossing them out. Better yet, get yourself a portable scanning system to organize receipts in your computer rather than piled up in a drawer. If you make it a habit to archive receipts for most purchases, you will have  a better opportunity to provide proof to banks when you report fraudulent charges. Some retailers may also offer to e-mail your receipt, which is a quick and paperless way to keep track of your expenses.

Make smart decisions

The smallest decisions can make all the difference in whether or not you become a victim of fraud. Using ATM’s without security cameras or outside of an established bank can put you in danger if the ATM has been outfitted to skim. Skimming means the card slot can read and copy the magnetic strip of your inserted card, replicating your information to an outside source. This, combined with a miniature camera that watches as you type in the PIN can mean thieves can duplicate your exact debit card and make withdrawals and purchases without your knowledge.

Bowl of shredded credit cardsWhile it’s common to buy things from online communities such as Craigslist and eBay, never agree to pay for items without using a trusted resource. PayPal can often handle transaction disputes if something goes wrong between you and the buyer/seller if reported within 45 days of the purchase date. If a seller insist on you paying with any other methods such as prepaid debit cards or direct deposit, consider walking away from the deal.

Scammers may offer to send you e-mails and phone calls to make you believe they are a real person, but always double check to make sure the phone number isn’t a Google Voice number that someone could have conjured up to hide their real contact information. If you’ve received an e-mail from the scammer, you can always try to check original source to see if an IP address is available to track the approximate location of the sender. Note that some IP addresses may be private and won’t yield any geographical location, but it’s worth a shot to look.

Tracking a scammer is never an easy task. The important thing is to get your money back first before trying to nail the thief, but with any information you can provide, take it up with your local police authorities to see what they can do to prevent it from happening to others.

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