My Bank Accounts and Credit Card Got Compromised

By Richard A Balch CFP

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It has been a trying three weeks.? I logged into my online banking account on September 8th and discovered multiple $1000 transactions totaling $9,450 being sent to an online betting firm in New Jersey.? It appears the transactions were being drafted via my debit card and generating overdraft transactions and charges.? I must have had my debit card skimmed somehow when I went on travel to either CA or St Louis, MO the week before.? I feel fortunate I caught the transaction on the same day I looked online at my account and not several days later.? I can imagine all my accounts being empty if I did not check until a week later.? I immediately called the bank and spoke to their fraud department.? They immediately locked down my accounts and this stopped my cash flow from them.? I would not be able to use any of those accounts until new ones got set up.? Something valuable I realized was I did have other bank accounts at other banks, so this did not stop my cash flow.

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I came in with my wife the next day to my bank to begin the process of reopening new accounts.? The problem is that I have several business accounts including one owned by a corporation and an account owned by a trust.? I could read on the face of the banker that this was not going to be at all fun to re-establish all the accounts.? The banker did immediately open a trust account for my wife and me.? Our son also had a bank account that was joint with me, so he had to go to the bank in Milwaukee (he is going to school there) and go through the headache of closing the account and reopening a new one.? I told my son I will no loner be joint on his account.

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My income cash flow from my broker-dealer to my business accounts were stopped.? Again, I had to rely on my other business accounts to float me.? I had to wait several days until I finally got new active business accounts.? Even then, my broker-dealer wanted a VOIDed check to re-establish payment back to me.? I spoke to the commissions department there and explained my situation and that I had no checks but needed to get the cash flow going again.? They finally settled on a letter from my bank signed by a bank officer documenting my account number and routing number.

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My payroll to my employees also was a mess.? I normally have a payroll business account which had to be rearranged.? However, with the timing of the account closing, the payroll processor already placed a debit on the account which then was rejected.? The payroll processor paid the payroll out of their funds but now I owed them $100 fee for doing this and I needed to pay another $100 wire fee to get money to them by close of business that day.? I had to re-establish the online banking with the SIMPLE Plan and the Federal and WI revenue collectors.

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Regarding my business credit card, it too was locked down.? When I called the credit card company, I discovered someone tried to purchase auto parts in Los Angeles, CA.? The card company caught the fraud and immediately locked the account.? The company did mail me a new card right away but the unprocessed charges on my card all got rejected.? These include my health insurance premiums, my various business expense billings.? I am still in process of re-establishing the new credit card account set-ups and I estimate this has cost me at least five-man hours of work.? I hastily closed the employee’s business cards and found out later I did not need to do that.? Only my account needed to be closed – so I had to deal with that correction also.

The bank finally reimbursed me the $9,450 three weeks later.? I believe the bank fraud department talked to the online betting company in NJ and got reimbursed the money.? The money got dumped back in my old joint account which was closed out, so I asked the banker to move that to my new joint account since I no longer had access to the old bank account.? Some lessons learned:

1. Despite banks wanting everyone to go paperless by using debit cards – I think you are at greater risk than with a credit card because debit card fraud can cost you your entire account.? I was very lucky to have caught it early and have the bank eventually reimburse me.
2. If you do online banking – check your accounts daily.
3. Have a back-up bank account at another bank for emergencies.
4. If you have multiple accounts that must be re-established, carefully review what the new accounts need to be reassigned to for electronic funds transactions (EFTs) as you may be unfamiliar with the new accounting numbers.? Create a cheat sheet of the account numbers.
5. Go through old bank and credit card statements and determine automatic transactions that were set up.? You will need to contact each vendor and re-establish a new account number.
6. The amount of time correcting the fraud event will cost many hours for both you and the financial institutions involved.? This will require great patience.

I hope you never have to experience bank or credit card fraud as it is an unpleasant experience.? The criminals have no compunction stealing all your hard-earned money and I hope they get caught someday.? It seems that this type of fraud is increasing every year.? It is important to be aware of this and take necessary precautions.

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Richard A Balch, CFP, CLU, RICP

Woodmen Financial Resources

1234 S Ridge Road

Green Bay, WI? 54304

1-920-499-8833 Ext 110

[email protected]

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Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc.,

PO Box 64284, St. Paul,? MN 55164(800)-800-2638 Member FINRA, SIPC

Woodmen Financial Resources and Woodbury Financial Services, Inc. are unaffiliated entities

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