Dear ABC News Fixer: I Am a Victim of Fraud

PHOTO: Pedestrians in front of Citibank branchScott Eells/Bloomberg via Getty Images
Pedestrians walk past a Citibank branch in New York, in this May 3, 2012 photo.

Dear ABC News Fixer: I have had a business checking account at Citibank for 17 years, but I recently have become the victim of fraud.

It started in mid-March. First, someone used Chase's QuickPay system to make three unauthorized debits for $2,000, $2,000 and $1,900.

Then they made another QuickPay debit for $2,000, and then they did it again, for the same amount, the day after that.

Citibank was able to stop the last two debits, but could not get back the $5,900 that was taken in the beginning.

Citibank's fraud people asked Chase for the money back. Chase won't deal with me, and says it's all with Citibank.

- Philip Brotman, New York, N.Y.

Dear Philip: As it turned out, your debit debacle wasn't over. Even as the ABC News Fixer began trying to unravel this case, another $2,000 disappeared from your Citibank account – not through QuickPay but through some other mechanism. More on that in a sec.

Our first move was to contact Chase, to try to put the $5,900 back into your Citibank account. We got in touch with one of Chase's media reps and they kicked it up to the executive office, and within a few days the money was back in your Citibank account. Hooray!

But we had barely celebrated that victory when the other $2,000 vanished. That turned out to be an easier fix involving Citibank.

When we asked them about it, they realized that after they credited the two $2,000 debits in the beginning, their system apparently thought it was one transaction being incorrectly credited twice. That triggered the other $2,000 debit. (If you find that confusing, you are not alone.)

Once they figured that out, they put the $2,000 back in.

Everything was hunky-dory at this point. But then the thief tried one more time – something you learned when Citibank called you to ask whether you'd authorized a withdrawal of $40,000. You assured them you had not, and they stopped that fraud, too.

You told us you think someone obtained your Citibank account number because, in the past, you had given it to customers of your biofeedback business so they could pay you electronically. Whoever obtained it apparently created a QuickPay account using your personal information, and then used it to move money from your Citibank account into their pockets. You have since closed your old Citibank account and opened a new one, a move that should thwart the fraudsters.

Your case made us wonder what protections exist for consumers in this age of electronic payments and receipts. We're always seeing TV commercials with happy people sending or receiving money on the bus or in their bed.

The federal rule that protects consumers in cases of debit card fraud – Regulation E – extends to transactions done with other devices, such as smart phones, according to the FDIC. Under Regulation E, consumers who report fraud linked to a checking account in a timely matter have limited liability –$50 if they report it within two days, and $500 if they report it within 60 days.

However, because your problems occurred with a business checking account, Regulation E did not apply, according to the FDIC and Citibank.

Note to small business owners: Be careful with whatever banking system you use. You might not get a happy ending like Philip's.

Citibank told us they do have multilayered security for their business accounts, though they also stress that customers need to safeguard their codes, user IDs and passwords.

We also talked to Susan Grant, director of consumer protection at the Consumer Federation of America. She says that as banking continues to get easier and electronic payments become more common, it's super important to protect all your information. Said Grant, "The bottom line is, as making payments and transferring funds gets easier and easier, it can also make fraud easier."

- The ABC News Fixer

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