I'm veering slightly off topic today, in the hopes that the things I've learned about dealing with banks during the past several days can help other households. And I guess it's not that far off topic, because it's Tax Day, and household funds are on everyone's mind.
Debit card fraud is a major issue for consumer banks and their customers. My comments concern the large consumer banks; small, local banks seem to do better at watching their customers' money, but it's conceivable they face the same fraud issues. Bottom line: you should always watch your accounts like a hawk.
Why? Why can't I just look at the monthly statement?
Great question. Because when someone hacks or duplicates a debit card, the stolen money leaves the customer's account. Contrast credit cards: when a fraudulent charge posts, the consumer has no liability for the charge during the investigation.
By federal law, consumer banks have TEN BUSINESS DAYS to re-credit fraudulently withdrawn funds, from the date you report the funds stolen. Anyone else think this law is ridiculous? And while we're on the subject of ridiculousness: Since when, in a free market economy, did the minimum level of customer service mandated by federal law become acceptable to consumers?
Anyone else feel they might be inconvenienced by an inability to access funds for ten business days?
Or flat out financially screwed?
And do you think the bank will make you whole, if you miss a mortgage payment, or an insurance payment, or a tax payment?
Will they repair your credit rating when you pay late, because they failed to watch your money? What do you think?
The banks' 800 numbers will never tell you this, but if your debit card bears the VISA or MC logo, the bank must re-credit the stolen funds within FIVE BUSINESS DAYS, due to a contract between the card issuers and the banks. Still an unacceptable inconvenience, but it's a modest improvement on ten.
Someone evidently duplicated my debit card and used it at a bunch of liquor stores and gas stations in NJ and Pennsylvania last week. I got the money refunded in one business day, because here's what I figured out:
1. Don't bother calling the 800 number or using the online service center. GO STRAIGHT TO SOCIAL MEDIA. If you tweet your displeasure, you will get a call from the chairman's office. If that doesn't work within an hour, call the 800 number. They are trained to dissuade you from "escalating" a complaint. They will say it's a routine matter, not a big deal.
Excuse me? It's a big deal, if we're talking about my money. You want your complaint escalated to the highest level possible and you want that done today. Insist.
2. Once you get a call from someone higher up (often called the Office of the Chairman or similar), have a list of what you want done to address the issue(s) at your fingertips. This includes a list of the fraudulent transactions.
This person will be impeccably polite and trained to make friends with you.
The best way to get what you need and want is to be very firm and professional. The conversation need not be heated, but you are not friends. They are trained to make you feel like you and the bank are co-victims. That's not a correct assessment: you trusted the bank to watch for and report fraud and they failed, yet they still have the power to make it right. You don't.
Insist on the relief you want, on the timeline you want. Remember: you are the customer.
3. Ask what they are doing to prevent fraud, and ask why the frauds weren't flagged, and why you weren't alerted by phone, text, or at least email. I promise the answer will be unsatisfactory, but go through the exercise anyway.
4. When the answer is unsatisfactory, wonder aloud whether the bank's failure to to ANYTHING to detect and stop fraud means the bank is in fact defrauding the FDIC and the IRS.
You're on a recorded line, so turn that fact to your advantage.
Ask why, if you are in Boston, for example, and the card was used to buy hundreds of dollars of booze in New Jersey, why you did not receive so much as a text, email or phone call?
Here's my theory, and it's just a theory until the great day comes that the Congress subpoenas the records and chairmen of the FDIC insured consumer banks:
The consumer banks look at debit card fraud as a routine cost of doing business.
Why? Because they bank on merchants and customers eating most of the cost of theft and fraud through fees and other charges. They write their relatively minor share of the fraud losses off against their profits on their tax returns, thereby cheating the American taxpayers.
And, in the unlikely event the banks fail, fraud losses undoubtedly will factor into the failure; the failure that the taxpayers will have to insure.
5. Once you have the attention of the rep on that recorded line, insist that they credit the funds IMMEDIATELY, while the investigation is pending.
Don't believe for a second this is impossible. Your big bank has way more money than you do. If they refuse, or even say they need to get back to you, say you are filing a complaint with the Federal Reserve. Just the threat makes them move faster.
6. Insist on confirmation that the compromised card is cancelled, but continue to watch your accounts. Banks stink at following up, and they aren't on the hook for fraud you fail to catch within 60 days.
7. Insist a new debit card be sent overnight to you at NO COST to you. Otherwise they'll try to charge you for the FedEx.
8. Insist that the rep refund ALL MAINTENANCE FEES on the account for the month(s) during which they failed to catch the fraud. They can do this without even putting you on hold, and it's more than fair: part of the reason you pay fees is so the bank watches your money. When they fail to make any effort to watch your money, they owe you at least the service fees for the month(s) when they were asleep at the switch.
9. Get the name of the person helping you and his/her direct line. I know you have already wasted a day on this, but you will need to follow up.
10. Write your U.S. Senator and Congressional Representative and demand legislation that puts the burden of debit card fraud on the banks issuing the debit cards, not on the consumer. Because really, why should consumer banks cheat the taxpayers and continue to enjoy sweetheart treatment from the government? Congressional and/or judicial action seems like the only way to make the consumer banks get serious about protecting their customers' accounts.
Think about it: the anti-fraud "chip" technology used in Europe for years greatly cuts down on debit fraud. The American banks have made a business decision that they'd rather write off the debit fraud losses they can't pass to merchants and customers, than pay to implement state of the art consumer protection technology for the benefit of their customers.