I recently logged into my USAA account to pay a bill and I noticed three large transactions from my joint checking account. My first thought was that my wife may have gone shopping (the category listed was clothing and shoes). But my wife isn’t the type of person to spend over $1,000 on three separate transactions at the same store, on the same day – in another country.
Further investigation showed the card in question was mine, not hers. It looks like I was the victim of fraud. Thankfully, I have USAA on my team, and they helped me take care of this situation in less than half an hour.
What to do if Your Debit Card is Stolen
I am very careful about how and where I use my debit and credit cards. I almost always use my credit card over my debit card because credit cards offer better consumer protections and better cash rewards.
I usually only use my debit card for ATM withdrawals. In fact, I distinctly remember one of the last times I used my USAA debit card to make a purchase. It was several years ago and I received a call from the USAA fraud department as I was leaving the store (I hadn’t used the card for a purchase in a long time, and I made the purchase in another state while on vacation, so USAA’s software flagged the transaction and their department called me).
But a stolen debit card or stolen credit card can happen to you, even if you take precaution. Thieves may, for example, plant a virus onto your computer, hack into a third party system that stores your debit card information, they could skim your card number when you make a purchase at a restaurant or other location, or you could simply lose your wallet.
In my case, I’ll never know how my debit number was stolen. But in all likelihood, my number was most likely compromised as part of a larger data breach.
File a Fraud Report – Immediately
The first step in any case of credit or debit card theft is to report it immediately. This will limit the damage to your account, get the ball rolling on having your money replaced in your checking account (it can take a few days), and get a replacement card sent to you.
Filling out a fraud report with USAA was easy – it took about 20-25 minutes total, and the customer service rep handled the entire process over the phone. All I needed to do was answer questions while he took down my information and verified my statements. Throughout the process the customer service rep never made me feel as though I did anything wrong (of course, I didn’t, but I’ve dealt with another company in the past in which the customer service reps had the sound of suspicion in their voice as they processed the fraud report).
This Highlights Why I Prefer Credit Cards Over Debit Cards
These thieves stole over $1,000 of my money. That is money that was immediately taken from my checking account. Thankfully, we had enough money in our account to cover the temporary loss of that money.
But we were lucky. Had we not noticed it, we could have bounced checks, and possibly had to deal with overdrafts fees and embarrassment. It’s just an ugly situation.
This event highlights why I primarily use credit cards, as they offer better consumer protections against fraud (read the FTC guidelines for stolen credit and debit cards for consumer responsibilities).
When your credit card number is stolen, the disputed charges should be removed from your available balance, which gives you the flexibility to continue spending as you normally would.
With debit cards, however, the stolen money is immediately taken out of your account, which can cause overdrafts and other problems. It can also take some time before you get the funds replaced. In other words, it can quickly become a financial nightmare.
Credit cards have other benefits in addition to stronger consumer protections, including cash back or rewards programs, and special programs such as rental car insurance, purchase protections, and more.
These are some of our recommended credit cards for military members. They offer great rewards and excellent consumer protections. However, I only recommend using credit cards if you can (and will!) pay your balance in full each month.
This Was an Inconvenience, But No Major Harm Was Done
In the end, this is an inconvenience for me, and for USAA. But I won’t lose any money. I should receive the money back in my account in a few days. I also had to cancel my ATM / Debit card, and I will get a new one in about a week or so.
Other than that, it was a half hour of my time and the hassle of not having a debit card for a week. I didn’t have any automatic payments routed through that particular card, so I didn’t need to cancel any payments and set up a new payment source. Had that been the case, this would have been a larger inconvenience.
Thankfully, I had enough money in my account that it didn’t hurt us. And thankfully we had USAA on our side during this event. I don’t want to think about what would have happened if either of those had not been the case.
Photo credit: Don Hankins.