Is the Bank Obligated to Refund Stolen Money From My Debit Card?

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Having your debit card stolen can have considerably more drastic consequences than having your credit card stolen. A debit card gives a thief direct access to your bank account. Depending on the course of action you take, the bank might not be obligated to give back your stolen money when your debit card is lost or stolen. Notify the bank as quickly as possible to limit your liability.

Reporting Right Away

It pays to let your bank know immediately if your debit card goes missing. You have no liability if you report the stolen card before the thief has an opportunity to use it. Ideally, the bank will have an opportunity to cancel the card before any unauthorized transactions can occur.

The Federal Trade Commission states that even if the bank doesn't cancel the card right away, you are still off the hook should the thief try to use the debit card after you've reported the loss.

Reporting After Two Days

Giving the person who stole your debit card two days to use the card increases your liability. As with credit cards, you'll be liable for up to $50 of unauthorized use of your card if you wait up to two days to report that it is missing. If you report the card missing an hour after you notice it has gone and someone has already used it, you'll still be responsible for up to $50.

Understanding 60-Day Rules

Your financial obligation increases tenfold if you wait more than two days to report a missing debit card. If you report the card missing between day two and day 60, you can be responsible for up to $500 of unauthorized charges. The bank has no obligation to refund stolen money if you wait 60 days after you receive the bank statement that lists the unauthorized charges. If you don't take fast action, you risk losing all of the money you have in the account, plus overdrawn amounts and overdraft fees.

Protecting Yourself from Theft

Since your debit card is connected to your actual money, it's important to protect it from theft and fraud. Consumer Action suggests checking your bank statements regularly so that you see any unauthorized charges as soon as they occur. If your card is stolen, call the bank right away to report it. The organization also suggests keeping your PIN a secret and making online purchases with a credit card only.

You can also send a letter after you call so that you have documentation in writing. To avoid having your debit card number stolen, consider only using a credit card when ordering online or over the phone.

How Banks Handle Unauthorized Transactions

A thief doesn't physically have to possess your debit card in order to make purchases with it. Once you've identified any unauthorized transactions on your bank statement and notified the bank, the bank will begin an investigation.

This investigation begins with the merchant associated with the charge you are disputing. The merchant can provide the bank with important information, such as where the item was purchased from or shipped. If neither of the addresses matches yours, the bank will likely refund you the money.

Should you not get a successful resolution from the bank, you do have the option of contacting the Consumer Financial Protection Bureau. They will request the bank's investigation report and then conduct their own inquiry. In some cases, you may also be asked to provide any documentation you have to back up your claim.