Gone Phishing? How To Get Your Money Back

If you’re like me, you get 10+ phishing e-mails a day, asking you to login to some fake bank account site. Heck, my PayPal account was “suspended” five times just today. (Although it was really was frozen once.) Combine this with all the other stories of private information stolen from laptops, and you’ve got lots of potential headaches.

This MSNBC article entitled ‘Know your rights on bank account fraud‘ clearly outlines what your legal rights are if you do become a victim of idenity theft through your bank account. Although it’s from 2005, I learned a lot of new and useful stuff from this article. To quote:

Consumers have well-defined rights with respect to fraudulent electronic transfers, and should generally be able to obtain refunds with little hassle. The rights are spelled out in what’s known as “Reg-E,” or the Federal Reserve Board’s Regulation E. The Fed was authorized to draw up the regulation by the Electronic Funds Transfer Act of 1979. The regulation covers all manner of transfers into and out of bank accounts outside of paper checks, including the use of debit cards. It does not cover credit card transactions.

Basically, Regulation E covers everything but paper checks and credit cards. This includes money transfers via the internet, telephone, ATM, or debit card.

Consumer liability
When a debit card or other “acccess device” is lost, such as an online banking password, consumer liability is capped at $50 for those who notify banks within two business days. Consumers who notify the bank within 60 days have their liability capped at $500. After 60 days, if the consumer doesn’t inform the bank, any charges which occur become the consumers’ responsibility. If no access device is lost, and fraudulent charges mysteriously appear on a consumer’s account, the liability clock begins when the bank notifies its customer of the activity, usually through regular monthly statements.

To summarize, speed matters. The potential difference between 2 business days and 3 business days is $450. I had no idea. If you wait 60 days, you get nothing. Of course, your bank may choose to make you entirely whole according to their own policies.

Comments

  1. Susannah says:

    It’s really not always that easy. Unfortunately, in the situation with bank accounts, the consumer has the responsibility of proving the fraud and their innocence. If someone steals your ATM card, it’s usually not so hard to prove. In the case of ACH transactions, however, it’s much harder to prove.

    In the case of PayPal, however, PayPal is usually pretty good about refunding fraudulent transactions (had over $1000 they refunded personally, not a phishing scheme, but someone had snooped packets on our router, and stupid me had some of my unsecure and secure passwords to websites the same, once they had my unsecure Yahoo password, they had my PayPal password, too).

  2. I think that’s the point of this article though, that you do have rights, even if you did do something stupid (as below). You just have to know what your rights are and fight for them.

    ?Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E,? the opinion indicates. ?Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer’s liability for unauthorized transfers.?

  3. Having recently been a theft victim, I was told by a washington mutual representative when I informed the bank of the theft on the day after the theft incident, that I’ll be fully liable of any missing money unless I close the account immediately. I had a mortgage payment check pending at the time so I wanted to close the account the next day instead of that day, but was hoping that they can put holds on any transactions attempted after my check number. No luck. The representative told me, “sorry, close it now or you’re fully liable”. She didn’t mention any caps.

    However, my sister, who also got her stuff stolen, went to another washington mutual branch, and was able to put temporary holds on any transactions after a certain date and check number. I may have just gotten a strange representative.

  4. See, that is where I would ask to speak with a manager, and see if they are familiar with Schedule E. If you show that you know your legal rights, I’ve found that they take things more seriously.

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