Bad Credit Services

Student victim of debit card fraud

Date 12/8/2005 12:00 AM | Topic: News

Imagine checking your bank account balance online and finding out that your account has a negative balance of more than $3,000. Even worse, you know you didn't spend the money. This is what happened to Duffey Ainsworth ('07) about a week before Thanksgiving break.

His mom left him a message explaining that something was wrong with his account. So he checked the balance online and found the balance was negative.

"I was thinking, 'this can't be real,'" said Ainsworth.

According to Ainsworth, the bank called his mother after money was taken out of his account from an ATM in Austria. The bank that Ainsworth uses, a branch of Amcore, is located in Ainsworth's hometown of Roscoe, Ill.

"I got a call from my mom and the bank had called her and was wondering if I was in Austria," he said.

This was one of the many factors that alerted the bank to possible fraudulent charges.

"I think it was the fact that I didn't have a lot of money in my account to start with. I went from a positive balance to a negative balance in one charge and it just kept going," said Ainsworth.

Ainsworth found it difficult to try to fix the situation from Iowa.

"I had to call the bank and tell them it wasn't me. I had to wait until I came home because I couldn't do anything over the phone," said Ainsworth.

Luckily for Ainsworth, his mother's name was on the account so the bank let his mother freeze it.

Therefore, these charges could not go through. By that time though, many withdrawals had been made.

"Right after she went in [to freeze the account] three more charges came through," Ainsworth said. "I think it was over $4,000 that was taken."

Unfortunately the bank was not able to figure out who made the charges.

"I guess they were saying that it came from an ATM so it could have been someone anywhere. They could have been sitting right next to me for all I knew," he said.

Ainsworth wasn't the only victim. About 30 people with accounts at the same bank also had fraudulent charges on their accounts. Ainsworth explained that most of the victims gave out their information in an e-mail they thought was from the bank.

"[The perpetrators] sent an e-mail that was identical to the one the bank would send. People would give out their information thinking that the bank just needed to update their information," Ainsworth said.

He explained that this is one reason the bank wanted to hold him responsible, even though he disputed that he made the withdrawals that caused the overdraft. They thought that he must have given out his information to the perpetrators.

Ainsworth never actually received one of these e-mails, so it is unclear how strangers got his account information.

"The bank said that because [the person who made the charges] used my debit card number instead of credit, I'm responsible for the first $60 or $70."

"In no way was this my fault," said Ainsworth.

In the end Ainsworth only had to pay five dollars. "I could deal with five dollars," he said.

What Ainsworth couldn't deal with was that he had no money to get home for Thanksgiving break.

"The only thing that the bank did wrong was that they left me out to dry," said Ainsworth. "That was the one thing that really upset me, I think. It was one of those things where you had to fend for yourself for ten days because that's how long it took [for the bank] to figure out it wasn't me. I pretty much had to rely on my parents and friends to fund anything for that time."

When Ainsworth did get home he permanently closed the account and opened a new one.

"I had to dispute the charges," said Ainsworth. "It took a long time because I had to sign a bunch of papers saying that it wasn't me. But it wasn't that hard."

Ainsworth took precautions in order to ensure that theft of this kind wouldn't happen to him again.

"Instead of getting an ATM card, I now have a college cash card," he said. "It's more like a credit card. That way if anything does happen, it won't be my responsibility."

Even with this precaution Ainsworth still hesitated to continue to work with that particular bank.

"It definitely made me think again about opening a new account with them," he said. "If they're going to let this happen, why would I want to stay with them?"

Ainsworth tried to do some investigating of his own, but knew he probably wouldn't accomplish much.

"It all happened electronically," he said. "I don't think I would have had any idea where to start. I tried to look up the place that was on the statement but it's in Austria."

The bank continues to try to find the perpetrator through the e-mails that their customers received.

"They told people that if they get e-mails [like the one asking for account information] that Amcore wasn't sending them out and to forward them to Amcore," he said.

What happened to Ainsworth would not be classified as identity theft because the person who made the charges did not attempt to use Ainsworth's identity to apply for credit. The cases of the other victims at Ainsworth's bank would qualify as "phishing."

Visa's fraud report defines phishing as "an e-mail scam in which fraudsters attempt to convince consumers to reveal personal information - such as their credit or debit account numbers, checking account information, Social Security numbers and bank account passwords - through official-looking fake Web sites or in a reply e-mail."

According to the Web site, the type of fraud that Ainsworth experienced, in which the card for the account being used is not present, is the most common type of banking/credit fraud.

Companies like Visa, that issue debit as well as credit cards, constantly develop more technology to try to prevent these types of frauds. The FTC, or Federal Trade Commission, recommends some simple ways to try to prevent fraud when using ATM cards.

Some of these include: not carrying your PIN with you or writing it on anything that can be easily seen, checking ATM and debit transactions before you sign for them and periodically checking the bank account for fraudulent activity.

According to the FTC, Ainsworth did everything right in his situation. He reported the loss as soon as he learned of it. The FTC reports that if a victim reports debit fraud within two days of discovering the loss, he or she can only be held responsible for a maximum of $50. This explains why the bank wanted to hold Ainsworth responsible for some of the money he lost.

Ainsworth could have been responsible for up to $500 had he not reported the loss sooner. Credit card holders on the other hand can only be responsible for an absolute maximum of $50 and cannot be held responsible at all if the credit card numbers alone are used fraudulently without the actual card.

Ainsworth also switched from a debit card to a credit card. The switch from ATM or debit cards to credit cards is the safest way to prevent this type of fraud.

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Lynn Juve

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