Can a Victim of ID Theft Recoup Any Money From a Bank?

Identity theft is defined as unauthorized use or attempted use of existing credit cards; other existing accounts such as bank accounts; or misuse of personal information to obtain accounts, loans or for other criminal purposes. In 2008, the Bureau of Justice reported that in a two-year period, the financial cost of identity theft was $17.3 billion and affected 11.7 percent of the population 16 or older.

Identifying Bank Fraud

If your identity is stolen and unauthorized transactions appear on your bank statement, you must ascertain if the withdrawals made were electronically or were paper transactions. If the thief wrote checks, the case falls under state laws, but if the withdrawal was made electronically, federal law prevails. If you are unsure what type of transaction occurred, contact the bank that processed it.

Electronic Withdrawals

If a thief uses an ATM or debit card, an electronic funds transfer or some other electronic means to debit or credit an account, you are protected by the Electronic Fund Transfer Act, which limits your liability for fraudulent transactions if you follow the reporting requirements. If your ATM or debit card is lost or stolen and you report it within two business days of discovering it, your loss is limited to the first $50 taken. If you report after two business days but less then 60 days from the date it appears on your bank statement, you could be liable for up to $500 of the loss. If you wait more than 60 days to report it, you could lose all of the money taken. If your card was used as a VISA or MasterCard to charge items, your loss is limited to $50 regardless of how much time elapses.

Paper Transactions

If you discover your checks are lost or stolen, contact your bank immediately, stop payment on the missing checks and close your account. Have your bank notify Chex Systems Inc. or the check verification system the bank uses so the checks can be flagged, which alerts retailers to decline them. This will minimize your losses if the thief forges your signature and passes the check. Federal law does not minimize your losses from paper transactions but some states have laws that protect you and most hold the bank responsible. You can also contact the major check verification services yourself by calling TeleCheck at 800-710-9898 or 800-927-0188, and Certegy Inc. at 800-437-5120. You can also call SCAN at 800-262-7771 to see whether bad checks were passed in your name.

Signs of Trouble

If you have a check rejected by a merchant, it may be because the thief is using the micro-encoding at the bottom of your check---he would need this if he counterfeited your checks; your driver's license number; or another identification number. Ask the merchant for the number of its verification service and call that company. It will tell you what number he's using. If it's your micro-encoding, call your bank and close the account. If you can't open an account, a thief may have opened one in your name. Contact Chex Systems and request a credit report. Chex Systems produces credit reports strictly about checking accounts.