Recently people have been complaining about a number of unauthorized electronic debits or access into their bank accounts, both checking and savings, by a group called Direct Funding Service.
The advice I’m going to give you is relevant to any unauthorized account access you may see on your bank account.
If your bank is an FDIC regulated bank you need to pay attention to these rules.
How to Stop Unauthorized Debits
It is critically important that you notify your bank or credit union at the first possible moment and make sure you have some proof of this notification. You may contact the bank in person, by telephone or in writing.
Timely notice given. If the consumer notifies the financial institution within two business days after learning of the loss or theft of the access device, the consumer’s liability shall not exceed the lesser of $50 or the amount of unauthorized transfers that occur before notice to the financial institution.
Periodic statement; timely notice not given. A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution’s transmittal of the statement to avoid liability for subsequent transfers. If the consumer fails to do so, the consumer’s liability shall not exceed the amount of the unauthorized transfers that occur after the close of the 60 days and before notice to the institution, and that the institution establishes would not have occurred had the consumer notified the institution within the 60-day period.
Following timely notification the bank must conduct an investigations and report or mail the results of such investigation and determination to the consumer within ten business days.
Consumer Liability for Unauthorized Transfers
(a) A consumer shall be liable for any unauthorized electronic fund transfer involving the account of such consumer only if the card or other means of access utilized for such transfer was an accepted card or other means of access and if the issuer of such card, code, or other means of access has provided a means whereby the user of such card, code, or other means of access can be identified as the person authorized to use it, such as by signature, photograph, or fingerprint or by electronic or mechanical confirmation. In no event, however, shall a consumer’s liability for an unauthorized transfer exceed the lesser of–
(1) $50; or
(2) the amount of money or value of property or services obtained in such unauthorized electronic fund transfer prior to the time the financial institution is notified of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that an unauthorized electronic fund transfer involving the consumer’s account has been or may be effected. Notice under this paragraph is sufficient when such steps have been taken as may be reasonably required in the ordinary course of business to provide the financial institution with the pertinent information, whether or not any particular officer, employee, or agent of the financial institution does in fact receive such information.
Notwithstanding the foregoing, reimbursement need not be made to the consumer for losses the financial institution establishes would not have occurred but for the failure of the consumer to report within sixty days of transmittal of the statement (or in extenuating circumstances such as extended travel or hospitalization, within a reasonable time under the circumstances) any unauthorized electronic fund transfer or account error which appears on the periodic statement provided to the consumer under section 906. In addition, reimbursement need not be made to the consumer for losses which the financial institution establishes would not have occurred but for the failure of the consumer to report any loss or theft of a card or other means of access within two business days after the consumer learns of the loss or theft (or in extenuating circumstances such as extended travel or hospitalization, within a longer period which is reasonable under the circumstances), but the consumer’s liability under this subsection in any such case may not exceed a total of $500, or the amount of unauthorized electronic fund transfers which occur following the close of two business days (or such longer period) after the consumer learns of the loss or theft but prior to notice to the financial institution under this subsection, whichever is less.
(b) In any action which involves a consumer’s liability for an unauthorized electronic fund transfer, the burden of proof is upon the financial institution to show that the electronic fund transfer was authorized or, if the electronic fund transfer was unauthorized, then the burden of proof is upon the financial institution to establish that the conditions of liability set forth in subsection (a) have been met, and, if the transfer was initiated after the effective date of section 905, that the disclosures required to be made to the consumer under section 905(a)(1) and (2) were in fact made in accordance with such section.
(c) In the event of a transaction which involves both an unauthorized electronic fund transfer and an extension of credit as defined in section 103(e) of this Act pursuant to an agreement between the consumer and the financial institution to extend such credit to the consumer in the event the consumer’s account is overdrawn, the limitation on the consumer’s liability for such transaction shall be determined solely in accordance with this section.
(d) Nothing in this section imposes liability upon a consumer for an unauthorized electronic fund transfer in excess of his liability for such a transfer under other applicable law or under any agreement with the consumer’s financial institution.
(e) Except as provided in this section, a consumer incurs no liability from an unauthorized electronic fund transfer.
You Should Change Your Checking or Savings Account Number
If someone gets access into your bank account without your permission the only way you can provide maximum protection to your account is by changing your account number.
You can do this by contacting your bank or credit union and they will assist you with this.
Yes, that’s a major inconvenience and you will probably have to change a bunch of other authorized debits and withdrawals you have already established.
BUT, if you don’t take swift and positive action to prevent unauthorized access into your account, more funds can be taken and you may be entirely liable for the resulting account deficit and fees that occur.
You need to take this seriously. If someone has unauthorized access into your account and you don’t take action they will be able to reach in and steal your money.What to Do About Unauthorized Withdrawals from a Bank Account by Steve Rhode