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Stolen Card Leads to Empty Account

 
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January 31, 2013
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QDear Erica,

My mother has a bank account where her Social Security checks are automatically deposited. She and I are the only two authorized users for this account. Someone, most likely a family member, has gotten hold of her debit card and PIN and drained the account over the course of a year (over $11,000). What recourse can I take? – Phil

AHi Phil,

I'm so sorry that your mother was robbed. That you suspect a relative is even worse. Crimes committed by family members never fail to astonish me.Ask Erica

A federal law called the Electronic Fund Transfer (EFT) Act protects consumers against such fraudulent transactions. Unfortunately, though, an awful lot of time has passed already. And when it comes to banks giving stolen funds back to the victim, early reporting is essential.

Had you discovered that the card was missing and reported it to the bank before the thief started withdrawing money, you wouldn't have to worry. The financial institution would reimburse every penny. However, you and your mom didn't discover the problem until long after the person tapped her account. Again, to minimize liability, swift reporting is essential. For example, according to the EFT Act:

  • If you reported the crime within two business days, the total loss would have been limited to $50.
  • If you reported the crime within two months after the statement showing the fraud was sent, $500 would be the maximum loss.
  • Any time after that 60 day period, and the loss is unlimited.

Don't despair if it's sounding like a lost cause. First, ask the bank to close the account and open a new one so that the stolen card and PIN can no longer be used. While you're at it, explain to the bank what has happened and see if they can help. Some banks have more lenient policies for their customers than the law itself. Even if they don't, maybe they can provide the camera footage. Of course that would only be relevant if the person used the branch's ATM or teller, but give it a shot.

Another possibility for resolution is if she has homeowner's or renter's insurance. Contact the company and find out if the policy covers credit and debit card theft. If it does, file a claim.

You should also file a police report. Identity theft crimes are typically not high up on law enforcement's list of dire importance, so you may have to be assertive and follow up. If you have a specific suspect in mind (and some proof) they'll be more apt to dig into the case.

It sounds like you are linked to this account, and that's good because you clearly have good intentions. Maybe your mom doesn't need a debit card, and if not, ask that the bank doesn't issue another. Or carry it yourself — that way you'll know where it is at all times. Read the account statements frequently (online is the way to go — there's no reason to wait for the bank to mail it to you) and jump on the phone the second you believe something is amiss.

A final piece of advice: Help your mother pull copies of her credit reports. Read them carefully, looking for evidence of identity theft. The con artist who stole her cash may have also opened credit cards in her name. If that's the case, you'll want to put a stop to it right away. Then, put a fraud alert on her files to prevent future crimes of this nature.

Got a question for Erica? Send her an email.


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