What to Do About a Stolen Debit Card

For the most part, debit cards are about as easy and convenient to use as credit cards. But a stolen debit card–that’s where things get a bit more complicated. When a credit card is lost or stolen, your liability is limited to no more than $50. When a debit card is lost or stolen, you could be on the hook for a good bit more.

Potential liability for a stolen debit card

How much you can lose on a stolen debit card will depend entirely upon when you report the theft.

• If you report the theft before the card is used by the thief, you will have no liablitiy
• If you report the theft within two business days your liability will be limited to $50
• If you don’t report the theft within two business days your liability will be up to $500
• If you don’t report the theft within 60 days of the mailing of the bank statement containing unauthorized use your losses are unlimited
• If the loss is due to the theft of your debit card number and not the card itself, you are liable only for transfers that occur after 60 days if you have not reported the loss

The unlimited loss can extend beyond the funds deposited into your account, to the unused portion of the credit line used for overdraft protection.

Report the theft to your bank–immediately!

As soon as you determine that your debit card is missing, report it to your bank without delay. Don’t speculate that you may have misplaced the card–assume that it was stolen. In the hours that you might spend looking for the card, a thief could be running up hundreds or even thousands of dollars in charges. And since it’s likely that the thief knows that the charges will be declined the moment you report the loss, he’ll probably waste no time putting your card to his good use.

Once you report the theft of the card, your bank will not only cancel it, but they’ll issue you a replacement card (and card number) immediately as well. Even if it turns out that the card was only misplaced and not stolen, you’ll have the peace of mind of knowing that you prevented the worst outcome from happening.

Debit card issuers such as PerkStreet Financial usually have an 800 number for just such purposes. Keep it handy, and keep it separate from your debit card that way you’ll have it if your card is stolen. This is especially important if the theft happens while you’re not at home. If you delay reporting the theft until you return home, you’ll waste days that will increase your liability for unauthorized charges.

The Federal Trade Commission (FTC), the government agency that issues guidelines on debit card issues, also recommends that you follow up the phone call to your bank with a letter that includes your account number, when you noticed the card was missing, and the date of your call to the bank to report the loss.

Check with your homeowners insurance carrier

You may have an unexpected ally in the event your debit card is stolen. Homeowners insurance policies contain all kinds of hidden goodies, and one of them might include covering your liability on a lost or stolen debit card.

Check with your homeowners insurance carrier to see if you have this coverage, or if they offer it if you don’t. Some companies will allow you to add it to your coverage, but the time to do that is now before the need arises.

Keeping an eye on your debit card

Prevention is always the best course of action, and while you may not be able to fully prevent the theft of your debit card, you can develop habits that will enable you to report the loss quickly and thus limit your liability.

1. Check to make sure you have you debit card at least once a day
2. Check your bank account activity at least every two days
3. Keep your debit card PIN number in your head, never in your wallet
4. Keep your bank’s 800 number someplace other than your wallet; a cell phone contact list or a saved, coded text message are some possible alternatives
5. Check your receipts before leaving an establishment, or immediately if the purchase is over the internet
6. Keep receipts (paper and cyber) at least until you confirm the proper charge with your bank
7. Online, deal only with trusted sources
8. Never provide your bank account or debit card information by phone or by email to anyone claiming to represent your bank–your actual bank already has your information and doesn’t need to verify it

On that last point, there are unscrupulous people out there who duplicate the web pages and emails of well known financial institutions and use them to gather information from unsuspecting card holders. The emails and sites are very convincing, but usually contain minor spelling and grammatical errors you’d only find on close inspection.

If you think such an email may be legitimate, contact your bank to confirm it, but never answer the email directly. If it’s asking for your information, it won’t be legitimate.

For more information contact the Federal Trade Commission website.

Note: You may want to look into Identity Guard for identity theft protection as well.

Have you ever had a debit card stolen? What did you do and how did it turn out?

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.

All posts by Kevin Mercadante