What role does your financial institution have in helping you out if you’re the victim of a scam or fraud?
GOBankingRates polled 1,141 Americans in August 2023 and asked them if they had ever been the victim of financial fraud or lost money because of it. Nearly 40% of the Americans surveyed said they had experienced some form of financial fraud. Of those who had lost money due to financial scams, 25% reported that they had lost between $0 to $250.
Losing up to $250 can easily put many Americans in a financial bind, especially those who live paycheck to paycheck. If you experience a financial scam, what does your bank cover?
The Role of Your Bank When You’re Scammed
Laura Sterling, VP of marketing at Georgia’s Own Credit Union, said banking customers who have been victims of fraud have regulations in place to protect them.
Reg E is one such regulation. Sterling said it offers protection against electronic transactions, including debit card purchases, ATM withdrawals, direct deposits, transfers via telephone and electronic payments. Typically, the financial institution will provide a provisional credit to your account within 10 days. If the bank concludes the charge was fraudulent, Sterling said they will remove the charge and issue a refund.
If you paid a scammer, the role your bank plays may differ based on a wide range of payment scenarios according to the Federal Trade Commission (FTC). Take a look below at the most common situations.
You Paid a Scammer Using a Credit or Debit Card
If you paid a scammer using a credit or debit card, the FTC recommends contacting the company or bank that issued you this card. Tell them this is a fraudulent charge. You can ask if they can reverse the transaction or reimburse your money.
You Paid a Scammer Using a Wire Transfer
Those who send funds to a scammer via a wire transfer through their bank are advised by the FTC to contact their bank and report the fraudulent transfer. Banking customers may ask for this wire transfer to be reversed and for the bank to give them their money back.
You Paid a Scammer Using a Money Transfer App
Did you use a money transfer app like PayPal, Cash App or Venmo to pay a scammer? In this situation, the FTC recommends reporting the fraudulent transaction to the company behind the app first. You can then ask them to reverse the payment.
If you have this account linked to your debit card and the card issuer is your bank, the FTC said you can report fraud with the bank and ask them to reverse the charge.
Pro Tip: Don’t Wait To Report a Scam
Because fraud is serious and expensive, Sterling recommends consumers who are victims of fraud do not wait to file a report. If you have lost a card, had a card stolen from you or suspect you may be experiencing fraud, contact your financial institution immediately.
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