Protecting Yourself From Consumer Banking Fraud

Protecting Yourself From Consumer Banking FraudRecent financial crimes against Target customers are a wakeup call for consumers across the country, reminding us that issues like identity theft and fraud can impact victims regardless of socioeconomic status. NYLAG’s Financial Counseling Division has been alerting our clients, especially those who face language or technology barriers, and arming them with the information they need to protect themselves. Because these crimes are so far reaching, we urge the community to share this information widely.

Target Incident

Target learned in December that hackers stole customer information, including debit and credit card data. More recently, they discovered that additional information, including name, mailing address, phone number or email address, was also taken. People who shopped at Target between November 29 and December 15, may have had their data stolen. Target has set up a hotline at 1-866-852-8680 that clients can call to request assistance in receiving free credit monitoring and identity theft insurance.

Credit v. Debit Cards

The regulations governing credit and debit cards differ, and can be confusing. Credit card holders are covered under consumer banking regulations; in the case of fraud, they only need to dispute a fraudulent charge, no money was stolen from their bank account. Debit card holders have a bigger problem: fraudulent transactions are immediately withdrawn from the holders’ account, forcing them to fight the charge in order to get their money back. If credit card information is stolen, consumer liability is capped at $50. Debit card accounts, along with online banking and ATM withdrawals, are covered by what is known as “Reg E,” rules that govern electronic transactions. If a consumer loses her debit card or if it is stolen, she must report the loss or theft to the bank within two business days of learning of the loss or theft in order to minimize her liability for unauthorized transactions. Consumers should regularly review their account statements and notify the bank as soon as possible of any unauthorized transactions. The sooner a consumer acts, the stronger her protections are under the law. The law does provide protections in the case of fraud, but uninformed consumers may not be aware of their rights, and just accept the loss. A consumer who is unable to resolve her dispute with the bank should seek legal assistance as soon as possible. Click here to learn more.

Avoid Identity Theft and Scams

With all manner of consumer fraud on the rise, it is important to be aware, and act with caution when sharing personal or financial information:

  • Never give Social Security numbers, passwords, user IDs or financial account information over the phone or by email or text. Ask for a call-back number instead.
  • Delete texts from numbers you don’t recognize.
  • Don’t open links in emails from unknown sources.
  • Don’t put personal information on unsecured websites.
  • Be alert when withdrawing cash from an ATM: stay watchful of those around you.

Fraud Alerts

Those who suspect that they are victims of identity theft, or any form of consumer banking fraud, should file a temporary fraud alert with one of the three major credit bureaus (Equifax, Experian and TransUnion). This will protect the consumer’s credit and credit score, and require creditors to contact the consumer before granting credit to anyone trying to open credit in the consumer’s name.

Click here for more information on disputing errors on credit reports.

Click here for the steps you can take if you become a victim of consumer banking fraud.