Everything you need to know about debit card fraud — from how it happens to how long you have to report it

• Debit card fraud may happen through card skimming or when someone steals your physical card.
• Debit cards don't offer as much protection as credit cards, and you can lose money.
• To reduce risk, review your bank statements frequently and avoid using your card at certain places.

A debit card can be a useful tool for accessing money in your bank account, but you'll want to be mindful of where and when you use it. If you're a victim of debit card fraud, you may be liable for significant fraud losses if you don't report it quickly to your financial institution. 

Here's what you should know about debit card fraud, so you can use it safely and minimize risk.

How debit card fraud occurs

Debit card fraud occurs when an unauthorized person uses your card without your permission. 

A criminal can most easily access your card information if your debit card is lost or stolen. However, they may also be able to access your debit card information through a process called card skimming.

Card skimming can happen anywhere — a shop, a restaurant, or an entertainment venue. People will utilize devices to capture card information, which they can later use to clone a card or make online purchases.

Is debit card fraud common?

In 2021, the FTC Consumer Sentinel Network received nearly 70,000 fraud reports where a debit card was used as a payment method by fraudsters. This resulted in a total loss of over $140 million for consumers.

"Debit card fraud, unfortunately, is all too common. Millions of consumers are affected by it each year. Most analysts who keep an eye on this noted that there was a very significant increase in card fraud overall, including debit card fraud during the pandemic," says John Breyault, National Consumer League vice president of public policy, telecommunications, and fraud.

Do debit cards have any fraud protection?

Your debit card agreement will define specific conditions of fraud protection, but generally, financial institutions refer to the Electronic Funds Transfers Act, also known as Regulation E. The Electronic Funds Transfers Act outlines debit card protections for consumers.

If you are your debit card is lost or stolen, timeliness will be an important factor in determining how much money you may be liable for in the fraud loss. There are three primary circumstances covered in the law, which are dependent on when you notify your bank. Here's a quick overview of how the law will protect you as a consumer: 

• Circumstance 1 ($50 maximum loss): You may be liable for up to $50 in fraud losses if you notify your financial institution within two business days of realizing that fraud occurred.
• Circumstance 2 ($500 maximum loss): If you notify your financial institution after two business days have passed but before 60 business days have passed, you may be liable for up to $500 in fraud losses.
• Circumstance 3 (Unlimited maximum loss): Your bank isn't required by law to reimburse you for any fraud losses that occurred after 60 business days. You'll also still be liable for up to $500 in fraud losses for unauthorized transactions that happened during the first 60 days.

To identify debit card fraud promptly, Breyault recommends checking bank statements at least once a week to see if there's any unusual activity on your account. In doing so, you can minimize risk and prevent the unauthorized person from making additional debit card transactions.

How to report debit card fraud

Call your bank immediately and ideally within two business days. The Office of the Comptroller also has additional resources for reporting and learning about fraud.

Your financial institution will conduct an investigation. Funds from your account relating to fraudulent transactions will be frozen while the bank investigates. The investigation may take anywhere from a few days to a few weeks, however, national financial institutions typically conduct investigations more quickly than community banks.

If the bank determines that fraud occurred, you may have access to those funds again. However, be aware that you may not get all your money back.