This weekend someone in Deerborn MI was using my debit card and cleaned out – more than cleaned out – my checking account.
Kind of scary, huh?
My bank assures me they will credit me back the lost funds and any overdraft charges but it does mean my checking account is currently empty. That’s the peril of a debit card vs a credit card. If this had happen with a credit card I wouldn’t be out anything until I got a bill. But with a debit card it is straight out of my account. To make things even worse, since this is my bank account, other things like checks and automatic drafts could bounce. My electric bill for instance comes out tomorrow automatically.
Luckily, or unluckily, my bank allows me to overdraft. It isn’t overdraft protection, it just means they will charge me $25 for every overdraft that happen. How long will they do this? Well because I’ve been with them for almost a decade, till I’m over $1900. Wow.
So the guy was able to charge $300 over my balance, but my electric bill won’t bounce. A two edged sword.
Pending transactions online
I caught this quickly and it was because of a relatively new feature of Compass Bank’s online banking. The the past they showed you your posted balance and your available balance. Your posted balance was those things that have actually cleared the bank, and you could see those transactions details. The available balance was things that hadn’t cleared. So if you used your card as a credit card, and the merchant ran a check on it, that was considered no longer available. But you couldn’t see these transactions.
Now you can. And it is amazingly quick. The other day my wife called me on the way home from the grocery store and already her purchase was showing on the bank’s website.
So Saturday evening when I looked at the bank’s website I was able to tell someone was using my card in Michigan. I called the card company but all they could do was cancel the card, and I wasn’t sure this wasn’t just some kind of mistake. But what I did do was go to the bank and take out most of the money in my account via the ATM. On Sunday evening when I checked again, there was another transaction and my account was overdrawn. I called and canceled my card at this point.
Normally weekend purchases don’t clear until Tuesday. Which would have given these guys another day, but because of the new feature I caught it quickly and was able to get some cash to keep me through the rest of it.
I can’t dispute the charges until they clear though, which means there is another day at least my money is just gone.
No more ATM cards
As an interesting related fact. I asked when I went into the bank today if they had just ATM cards that weren’t debit cards. And they said no.
I think in the future I’ll use a credit card more and my debit card less. Not only can I pay off my credit card every month with no interest, I can pay as soon as I make the purchase if I want. Also I can get cash back on purchases, which my debit card won’t do. And of course I get the protection of credit cards delay.
Ahh, the world we live in.