What to Do When Your Bank Account Is Hacked
By: Robert J. Nahoum
THE PROBLEM
Your bank account has been hacked, money has been taken without your authorization, and your bank refuses to refund you the stolen money. As cascade of problems overwhelms you – without your money, you can’t afford to pay your bills increasing your debt and making your financial life increasingly unstable. What do you do?
THE RULES
The federal Electronic Funds Transfer Act (EFTA) offers consumers like you vital protections. Here’s a comprehensive guide covering what to do next
EFTA Requirements and Bank Investigation
When you report an unauthorized transaction:
- The bank must investigate within 10 business days. If more time is needed (up to 45 days), the bank must provisionally credit your account for the disputed amount while the investigation continues.
- Once complete, the bank must inform you in writing of the results, and if the error is confirmed, immediately correct the account.
- If your bank refuses to refund the money, or fails to follow these procedures, you may have grounds for an EFTA lawsuit.
Timelines and Deadlines
- Within 2 business days: Report the unauthorized transaction to minimize your personal liability to $50.
- Within 60 days: Must report after discovery via your bank statement, or else risk larger financial losses.
- Bank investigation: Must be completed within 10 business days, provisional credit required if taking longer (up to 45 days total).
What to Do When Your Bank Account Is Hacked
If you’re a victim of unauthorized electronic fund transfers (EFTs), you must act quickly:
- Notify your bank immediately after noticing suspicious activity or unauthorized transactions. Under the EFTA, your liability is limited to $50 if you report the unauthorized withdrawal within two business days of discovery.
- If reported after two business days but within 60 days of your bank issuing the statement showing the unauthorized transfer, your liability is capped at $500.
- If you wait more than 60 days, you could be liable for all unauthorized transfers that occur after those 60 days and before your report.
- File a police report with your local police department. The more detail you can give the police the better.
- Retain all documentation, such as transaction records and correspondence with the bank—these will be crucial if you need to escalate your claim.
Filing a Lawsuit Under the Electronic Funds Transfer Act
If you have followed the EFTA process and your bank still denies your claim:
- An EFTA lawsuit can be filed in federal court against your financial institution. The process typically involves demonstrating that the withdrawal was unauthorized and that you complied with all reporting requirements and deadlines.
- Collect all supporting evidence: bank statements, police reports, copies of correspondence, and your written report to the bank.
- Having a knowledgeable consumer protection attorney can increase your chances of a successful outcome, as banks sometimes fail to comply with EFTA mandates.
Damages and Recovery in an EFTA Lawsuit
Should you prevail in an EFTA lawsuit, you may be entitled to:
- Actual damages: The direct financial loss due to unauthorized transactions.
- Statutory damages: Generally between $100 and $1,000 for individual violations.
- Attorneys’ fees and costs: Reasonable legal fees and litigation costs if you win, making it easier for consumers to pursue claims.
- Treble Damages: Treble damages are a type of punitive award where a court can make the bank pay three times the amount of your actual loss as a penalty for its conduct. The court might impose treble damages if it finds that the bank didn’t follow the rules for limiting your loss, failed to credit your account during the 10-day investigation period and didn’t finish the investigation on time or give a valid reason for denying your claim, or didn’t act in good faith while investigating the dispute.
Takeaways and Best Practices
- Time is of the essence—report unauthorized withdrawals as soon as possible to minimize loss and maximize your legal protections.
- If your bank refuses to refund a clearly unauthorized withdrawal, consult a consumer finance attorney experienced in EFTA litigation—actual and statutory damages plus attorneys’ fees may all be recoverable.
- Retain all evidence and records related to your case for use in both the initial dispute and any subsequent legal proceedings.
If you need help recovering money lost to a bank account hack, contact us today to see what we can do for you. With offices located in Brooklyn and the Hudson Valey, the Law Offices of Robert J. Nahoum represents consumers in cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
www.nahoumlaw.com
info@nahoumlaw.com