Lost or Stolen Debit Cards: What to Do Now, Minimize Risks
Are You Liable? Do Banks Cover Theft?
When your debit card goes missing or thieves use your card number, it’s critical to act quickly. Unauthorized charges cause problems for both debit and credit cards—but debit cards are especially problematic:
- Debit card charges go directly to your checking account, so unexpected transactions can drain your account. As a result, you could fail to make important payments like rent, mortgage, and insurance premiums.
- Your liability for a stolen debit card is greater than your risk with credit cards—unless you report the problem quickly enough.
The resolution process is the same whether thieves steal your card or you still have it (and they just use the card number). But you have more time to prevent losses if you have possession of your card.
Contact Your Bank
The most critical step is to contact your bank—immediately. Let them know that your debit card has been stolen or that you suspect fraudulent use of your card number. The sooner you do this, the more you limit your risk. Federal law protects you from fraud and errors in your account, but your protection depends on specific criteria:
- If you notify your bank before thieves use your card, you aren’t responsible for any charges.
- Your loss is limited to $50 if you notify your financial institution within two business days after learning of the theft.
- After that, your loss could be as high as $500 as long as you report within 60 days of your account statement date.
- After that, you risk unlimited loss and complete responsibility for charges in your account.
If you still have the card, but somebody stole your card number, you have 60 days to report any fraudulent transactions and have the bank cover your losses. After 60 days, you’re responsible for the charges.
If you think the card is just lost, but not stolen, you need to decide how to proceed. The safest approach is to contact your bank immediately and order a replacement. But some banks allow you to disable your card online or through an app. Doing so prevents anybody from using the card while you figure out if it’s gone for good.
To contact your bank, use a phone number on your bank’s website or via your bank’s mobile app. Banks typically accept these reports 24/7, so don't wait until Monday. You may also have the option of submitting a report online (or through your bank’s app). After verbally notifying your bank, you may need to follow up with a written report—this is essential to protect your rights. Failing to do the paperwork (yes, it’s a pain) could mean you failed to “report” the theft.
In addition to your protection under federal law, your bank or card issuer might provide “zero liability” protection. Sometimes those features are more generous than the law requires.
Credit Card Risk vs. Debit Card Risk
Credit cards are safer than debit cards, so they’re probably a better choice for everyday spending. Every time you use a payment card, you take a risk by exposing your card number to the world.
Limited losses: With a lost or stolen credit card, you’re only liable for up to $50 of unauthorized charges under federal law. And just like with debit cards, you’re not responsible for charges that hit your account after you report the loss.
Cash flow: Your debit card pulls funds directly and immediately from your checking account. With a credit card, on the other hand, fraudulent charges just increase a “hypothetical” account balance that you have an extra 30 days to pay off and that creditors cannot attempt to collect while in dispute. If thieves use your debit card to empty your checking account, you’ll have a harder time paying bills and making essential purchases because your money is gone.
Slow resolution: Once you notify your bank of a debit card problem, the bank has up to ten days to investigate your claim and temporarily (until they complete the investigation) replace those funds in your account. Living without your money for ten days might not be feasible. If you’re unable to make payments, you’ll face additional late charges from vendors and insufficient funds charges from your bank. Add those fees to the amount of time you need to spend cleaning everything up, and credit cards look especially appealing.
All that said, a debit card can still be safer than cash: If a pickpocket gets a wallet with cash, you’re never going to see that money again. Using a stolen card is risky, and most thieves won’t cross that line. Plus, you can get fraudulent charges reversed if your bank will cover them.
How Did They Get My Card Number?
If you still have possession of your card, you may wonder how thieves are using it for online purchases—and even withdrawals from ATMs.
Debit card numbers get stolen regularly, and sometimes you’re not even involved.
- Hackers can steal card numbers in massive data breaches when they break into retailers’ computer systems.
- ATM skimmers and pocket skimmers grab your card number, and hidden cameras can pick up your PIN as you type it in.
- Dishonest employees almost anywhere can copy down your card information.
To protect yourself, avoid using your debit card at any merchant you’re not familiar with. Again, credit cards are safer. Any buffer you can put between your checking account and a thief is helpful. Payment services like PayPal are also effective buffers for hiding your account information. Use your chip card—and insert the card instead of swiping—to reduce the chances of stolen data.
If you really like debit cards, consider a prepaid debit card for shopping at places where your number could get stolen. Those cards don’t require any credit check, and thieves can only take what you load onto the card.
Check your account statements regularly. Unfortunately, it’s not safe to let things run on autopilot. To make it easier, set up text or email alerts in your checking account to notify you of activity in your account. That helps you detect problems and report theft to your bank quickly, which minimizes your liability.