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For a singular transaction, a thief might limit themselves to something well under $10k. If a thief makes multiple withdrawals totaling $16k, which is over the

For a singular transaction, a thief might limit themselves to something well under $10k. If a thief makes multiple withdrawals totaling $16k, which is over the FDIC insured amount, would a bank really just compensate you for that? Wouldn't that be out of the graciousness of the bank (or PR)?

nimih 6y ago
In the US, as long as you notify the bank within 60 days of receiving a statement that has fraudulent transactions, your maximum liability is $500, and that goes down substantially if you notify the bank promptly of a lost/stolen card, or if the card was not lost in the first place[0]. So yes, the bank really would[1] just compensate you for that, provided you notice the fraud within 2-3 months of it occurring (depending on how quickly you get a bank statement). Edit: You may still be on the hook for overdraft fees from e.g. authorized payments, and it may take some time for the bank to indemnify you, which is why the conventional wisdom is that CCs are safer than debit cards from a fraud perspective. [0] https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-cr... [1] and is in fact legally required to: https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf https://www.federalreserve.gov/boarddocs/caletters/2008/0807...
PeterisP 6y ago
At least in EU that would be a legal requirement (Payment Services Directive rules that limit liability for unauthorised transactions), not graciousness/PR of the bank. FDIC insurance (and its equivalent in other countries) is something completely unrelated - it's for cases when the bank is unable to pay you because it goes bankrupt for some reason (which may include massive fraud done to the bank or by the bank), it's not for cases when your money gets lost in some other way.
vkou 6y ago
The $10k thing is only necessary for AML compliance. Since the bank is on the hook for giving out customer money to random con artists, their threshold for investigating suspicious account activity is much lower.

nimih 6y ago

In the US, as long as you notify the bank within 60 days of receiving a statement that has fraudulent transactions, your maximum liability is $500, and that goes down substantially if you notify the bank promptly of a lost/stolen card, or if the card was not lost in the first place[0]. So yes, the bank really would[1] just compensate you for that, provided you notice the fraud within 2-3 months of it occurring (depending on how quickly you get a bank statement). Edit: You may still be on the hook for overdraft fees from e.g. authorized payments, and it may take some time for the bank to indemnify you, which is why the conventional wisdom is that CCs are safer than debit cards from a fraud perspective. [0] https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-credit-atm-and-debit-cards https://www.consumer.ftc.gov/articles/0213-lost-or-stolen-cr... [1] and is in fact legally required to: https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf https://www.federalreserve.gov/boarddocs/caletters/2008/0807...

PeterisP 6y ago

At least in EU that would be a legal requirement (Payment Services Directive rules that limit liability for unauthorised transactions), not graciousness/PR of the bank. FDIC insurance (and its equivalent in other countries) is something completely unrelated - it's for cases when the bank is unable to pay you because it goes bankrupt for some reason (which may include massive fraud done to the bank or by the bank), it's not for cases when your money gets lost in some other way.

vkou 6y ago

The $10k thing is only necessary for AML compliance. Since the bank is on the hook for giving out customer money to random con artists, their threshold for investigating suspicious account activity is much lower.