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How can I prove my business bank account was used for fraud?

Gather as much documentation as you can and file a police report. And in the future, use a business credit card instead of debit

Summary

If you suspect fraudulent purchases were made with your business bank account, gather documented evidence and file a police report. To prevent future incidents, consider using a business credit card, which offers more consumer protections than a business debit card.

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Dear Your Business Credit,

I run a two-man LLC with a business account at a big bank. I had alerts set on my account when I opened it a year ago. I use my account for weekly paychecks to my son (my business partner) and my debit card for gas and a few tool vendors. I never use it for online shopping.

My statement for September showed over 200 transactions on a giant e-commerce retailer for over $7,500. Not once did the bank notify me or flag my account for suspicious activity. Neither did Amazon. None of the purchases were from my account with the e-commerce retailer.

Worse, they say that tracking numbers show all the packages were delivered “at/in mailbox” but no specific address. My mailbox is on the side of the road at the end of a long driveway. The house next door is vacant. I know that hackers can clone and hack almost anything and their scams are more devious and elaborate every day.

The bank has “temporarily” credited my account but keeps calling and asking me if I received the packages because that is the e-commerce retailer’s claim. I am the victim here. What proof can I show that this type of scam and fraud is real, other than my word? – John

Dear John,

I can understand why you are very frustrated.

It wasn’t 100% clear to me from your note if it was your business debit card account number that was stolen, but from the context in your note, it sounds like this was the relevant card.

If so, it is important to note that the laws that protect consumers from credit card fraud don’t apply to business debit cards. You must rely on the zero liability policy of the card issuer.

Check out all the answers from our credit card experts.

Ask Elaine a question.

Some card issuers will decide to reimburse business card holders, but it may take a while. The bank you mentioned says on its website that all of its debit cards have a zero liability policy and that the bank does not hold you responsible for unauthorized transactions you report promptly if you have taken “ordinary care” in the use of your card and PIN.

Another challenge in your situation is that federal regulations don’t address how merchants must handle disputed business debit card purchases, so you’re relying somewhat on the goodwill of the merchant.

Because there isn’t much legal protection for business debit cards, I don’t recommend using a business debit card at all. I don’t use one myself.

If your business debit card was indeed compromised, I would strongly recommend canceling it and switching to using a business credit card when you need to make electronic purchases. Federal law covers fraud on business credit cards.

See related:  Suspect card fraud? How to file a claim

Report the fraudulent charges to the police

So what do you do about the $7,500 in charges that have been temporarily credited? In your situation, I would do everything possible to document that the purchases were fraudulent.

The first step is to go to your local police station and file a police report. Because credit card fraud is so widespread, many local police departments are taking a much more active approach than in the past and can be helpful in investigating.

When I was victimized in business credit card fraud and later an ATM fraud, I found my local police were much more helpful and active than my bank at that time.

Given that the shipping documents don’t give a delivery address, it doesn’t seem like the bank has any proof that you received the merchandise.

It would seem reasonable for the police to ask the retailer to document the information on the tracking slips, so they can investigate where the deliveries actually were made. I would ask the police if they will subpoena this information when you visit the station.

Place fraud alerts on your credit reports

I would also contact the major credit bureaus – Equifax, Experian and TransUnion – and place a fraud alert on your account. Also report the identity theft to the Federal Trade Commission. The FTC’s site will take you through the process and help you come up with an action plan.

Doing these things does not guarantee the bank will side with you, but it will show your seriousness in documenting your case. Banks have to be careful to check out fraud when they resolve claims, but a responsible bank will not want its customers to feel it is allowing criminals to raid their bank accounts with impunity, either.

If, after doing all of this, you still can’t get anywhere, I’d recommend speaking with an attorney familiar with the laws of your state who specializes in fraud and identity theft. The amount of money these crooks stole is substantial enough to make it worthwhile to get expert advice.

See related: 7 exceptions to ‘zero liability’ policies

Change all of your card account passwords

Given that you don’t know how this fraud occurred, I’d recommend changing all of your credit and debit card passwords, in the event you used the same one for multiple accounts.

Sometimes passwords are sold on the dark web, and you don’t want to be victimized again. Set up two-factor authentication for all of your cards, as well.

It may take some persistence and paperwork but it looks like you have a strong case. Good luck!

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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