Fighting debit card fraud: one man's persistence pays off

Black Enterprise, Oct, 1996 by Majorie Whigham-Desir

Problem: You discover your bank issued debit credit card has been fraudulently used to make unauthorized purchases for almost a year. How do you get the purchases to stop and get your bank to reimburse your account?

That was the problem faced by Roy Funderburk of Alexandria, Virginia, when he became the unsuspecting victim of debit-card theft by a Washington D.C. gas station. It all began when Funderburk reviewed his monthly bank statement from American Security Bank (now Nationsbank) and noticed that there was a duplicate transaction number for a gas purchase made with his debit Visa card. (A debit card functions much like a cash machine card, directly withdrawing funds from your checking account but featuring a line of credit usually based on the amount in your savings account.)

"I use my debit card instead of cash to make most purchases," explains Funderburk. "Normally I don't review my statements; I just peruse them and go over the larger purchases." The transactions stood out since they were both for the same date and amount: $15 at a gas station he didn't regularly use.

Funderburk began reviewing previous month's statements. His suspicions were confirmed when he "noticed that the transaction numbers were the same but used to purchase things I'd never bought at places I'd never been." When he'd added up all his statements, he discovered that $1,008.80 had been stolen over nine months. Since none of the purchases were for more than $20--a common pattern for this kind of theft-they'd failed to attract his attention earlier.

Funderburk then went to the branch manager of his bank with his findings and supporting statements and receipts. He filed an "affidavit of unauthorized bank card transaction(s),' giving an itemized list of the purchase amounts, dates and the merchant number where the items were purchased.

"The assistant branch manager told me they were only responsible for purchases made over the past 60 days, and that I should have been reviewing my statements and reported my findings before. However, the branch manager said that all of my money would be returned to me with interest, since it was in an interest-bearing account."

A month later, the bank had "provisionally" credited $247.94, plus $1.24 in interest, to Funderburk's account, pending completion of its investigation. This amount represented what had been fraudulently deducted within the 60-day period. The balance of $717.77 was the amount Funderburk was liable for because he'd failed to notify the bank within the GO-day time period.

Undeterred, Funderburk followed up with every kind of governmental and consumer agency, from the D.C. police to the fraud division of the FBI and Secret Service. All of Funderburk's complaints were to no avail, since every agency sent him back to his bank. "They kept throwing up the statute of limitations and turned me away." He decided to get legal help.

"An attorney told me it would cost me more than it was worth, and suggested that I take it to small claims court since the amount was under $1,500." Funderburk filed his case against the bank in small claims court.

But getting his bank to acknowledge receipt of his claim was another story. The bank did not send back the mailed subpoena, and Funderburk's day in court was delayed. He spent another $20 to have the court issue another subpoena, this time served by a processor. The bank got it and followed up with a letter to the assigned judge asking for the case to be dismissed based upon the 60-day statute of limitations.

"I had no idea that was going on, but when they read your name off in court, you have to appear," Funderburk recalls. Since the bank did not appear, the judge asked Funderburk to explain his case. "I outlined all the avenues I'd gone through, but even the judge sent me back to the bank. He wouldn't throw the case out, but he told me to resolve it with them."

At this point, Funderburk got in touch with his local "Call For Action" group, a consumer advocacy organization. They couldn't help him since he'd started legal action, but they suggested some steps he could take. About an hour after leaving court and speaking with the organization, Funderburk received a call from the bank's attorney asking how the case could be resolved.

"I told them all I wanted was my money back, without interest or the cost of bringing the case--about $100," Funderburk says. After he signed an "order of satisfaction," the bank refunded him $760.86, the balance plus interest. "They [the bank] thought I was going to roll over and go away.

Funderburk did the right thing by being persistent, suggests Joseph Anthony Romero III, superintendent of banking and financial institutions for Washington D.C. For those who become victims of the same form of fraud, Romero offers the following suggestions:

* Go to a branch manager and get him or her to follow up. If they don't, get in touch with the senior ranking officer in charge of bank operations. If they in turn don't investigate, follow up with the superintendent or commissioner of banking in that state.