A woman lost more than $1,100 to unauthorized bank charges — not because her bank failed to protect her, but because she didn't catch the fraud in time.
Dorothy Bush discovered her checking account was overdrawn after an unauthorized $78 monthly cell phone charge had been quietly draining her account.
WATCH as a woman leanrs she is only protected for two months worth of fraudulent charges:
"I looked at the amount, and it was a negative number," Bush said.
She immediately went to her bank to investigate, learning that the fraud stretched back a year and a half. Her bank, however, would only reimburse charges from the past 60 days.
"I was told when I filed all the paperwork that the bank only covers two months of charges when it's fraud, and I was just heartsick," Bush said.
Why only 60 days to report?
That 60-day window is rooted in federal law.
Under the Electronic Fund Transfer Act, or EFTA, consumers are protected from some unauthorized transactions — whether they are errors or fraud. But the clock starts ticking the moment a bank statement is issued.
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Karen Bennett, senior consumer banking reporter at Bankrate, explained what's at stake if customers wait too long.
"If you notify your bank within 60 days of the bank statement coming out, you're only liable for up to $500 in money that's lost," she said. "However, if you wait longer to notify your bank, the bank is no longer required to investigate and you're probably going to be liable for the full amount."
The EFTA covers a range of situations, including:
- A debit card that is stolen and used to make purchases
- Someone stealing personal information to transfer money out of an account
- A subscription service that charges a fee after cancellation
- A financial institution's bookkeeping error
"In general, things covered under the EFTA include ATM and debit card transactions, direct deposit, as well as peer-to-peer payments like Zelle or Venmo," Bennett said.
However, the EFTA does not cover:
- Paper checks
- Wire transfers
- Prepaid cards
- Credit cards, which are covered under a different federal law
Even if an unauthorized charge appears small, Bankrate advises reporting it immediately so that a thief does not continue to steal larger sums over time.
Bush, who previously received paper statements from her bank, said the experience taught her to review her electronic bank statements carefully.
"I would have noticed it the first month, but I don't get a paper statement, and it's really hard to find what's gone on, what charges have gone in, on the website," she said. "I stumbled on it. That really was my undoing, and my bad for not looking closer."
Check your bank statements carefully. After 60 days, know that a bogus charge may no longer be covered, so you don't waste your money.
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