Bank fraud is when someone uses your bank account, card, or identity to move money or open accounts without your permission

Bank fraud means a person takes money from your account, uses your card to make purchases, or opens new accounts in your name — all without asking you. The person doing it might be a stranger who stole your information, someone you know, or even an employee at a bank or payment company. The result is the same: money leaves your account or you end up owing money you never borrowed.

Bank fraud is a crime. It harms you directly because the money is yours, and it harms the bank because they have to investigate and often refund you. That is why banks have fraud detection systems and why the law protects you — but only if you report it quickly.

Key Takeaways

  • Bank fraud happens when someone uses your account, card, or personal information to move money without your permission.
  • Common types include card fraud (someone uses your debit or credit card), account takeover (someone logs into your account), and identity theft (someone opens new accounts in your name).
  • You are protected by law from most fraudulent charges, but only if you report them within a specific time window — usually 30 to 60 days.
  • The fastest way to stop ongoing fraud is to call your bank directly, not through a number on a suspicious email or text.
  • Freezing your credit and monitoring your accounts regularly are the main ways to catch fraud early.

The three main types of bank fraud

Card fraud is when someone uses your debit card or credit card number to buy things or withdraw cash. They might have stolen the physical card, found your card number online, or gotten it from a data breach at a store or website. You notice it when a charge appears that you did not make.

Account takeover happens when someone logs into your actual bank account using your username and password. They might have guessed your password, bought it from a criminal marketplace, or tricked you into giving it to them. Once inside, they can transfer money out, change your contact information, or lock you out of your own account.

Identity theft for fraud is when someone uses your name, Social Security number, or other personal details to open a new bank account, credit card, or loan in your name. You might not notice for weeks or months because the statements go to an address you do not check. This type often shows up first on your credit report, not in your existing accounts.

How fraudsters get your information

Criminals collect bank information in several ways. They buy stolen data from the dark web after a company gets hacked. They send fake emails or texts that look like they are from your bank, asking you to "confirm" your password or account number — this is called phishing. They install malware on your computer that records everything you type. They steal your mail or go through your trash for bank statements or pre-approved credit offers.

Some fraud is low-tech: a person you know writes a check from your account, a family member uses your card without asking, or a coworker sees your PIN at an ATM. The method does not matter for your protection — the law treats all of it the same way.

What happens when you report fraud to your bank

When you call your bank and report fraud, they will freeze your account or card to stop more charges. They will ask you which transactions were not yours. They will start an investigation, which usually takes 10 business days but can take up to 45 days. During that time, your account may be limited — you might not be able to use your card or withdraw cash while they verify what happened.

Once the investigation is done, the bank will either refund you or tell you they believe the charge was yours. If they refund you, the money goes back into your account. If they say the charge was yours and you disagree, you have the right to dispute it in writing, though the bank does not have to change their decision.

The time window matters: if you report fraud within 60 days of the statement date when the charge appeared, federal law says the bank must refund you unless they can prove you authorized it. If you wait longer, you may lose that protection. This is why checking your statements regularly — even just once a month — is important.

Protecting yourself from bank fraud

The strongest protection is a strong, unique password for your bank account — one you do not use anywhere else. If one website gets hacked, criminals try that same password on banks and email accounts. Use a password manager like Bitwarden or 1Password to create and store long, random passwords so you do not have to remember them.

Turn on two-factor authentication (also called 2FA) if your bank offers it. This means that even if someone has your password, they cannot log in without a code sent to your phone or generated by an app. It is the single biggest thing you can do to prevent account takeover.

Check your bank and credit card statements at least once a month. Look for charges you do not recognize. If you see one, report it when ready — do not wait for the statement to arrive in the mail. Set up account alerts through your bank's app or website so you get a notification when a large purchase is made or when someone tries to log in from a new device.

Freeze your credit with the three major credit bureaus — Equifax, Experian, and TransUnion — if you are worried about identity theft. A credit freeze means no one can open a new account in your name without unfreezing it first, which requires a PIN only you have. It is free and takes about 10 minutes per bureau.

What to do if you think you are a victim

Call your bank when ready using the number on the back of your card or on your statement — not a number from an email or text, because that might be fake. Tell them which charges are not yours. Ask them to freeze your account and issue you a new card.

If the fraud involved your debit card, ask your bank whether they will refund you while they investigate. Some banks do this automatically; others require you to ask. If you do not have access to your money during the investigation, you need to know that upfront.

File a report with the Federal Trade Commission at IdentityTheft.gov. This creates an official record and gives you a recovery plan. If the fraud involved identity theft — new accounts opened in your name — also file a police report in your city. You will need both documents if you have to dispute charges with creditors or prove the fraud was not your fault.

Check your credit report at AnnualCreditReport.com (the only free, official site) to see if new accounts were opened in your name. You get one free report per year from each bureau. If you see fraud, dispute it with the bureau in writing.

The difference between bank fraud and scams

Bank fraud is when someone takes money from an account that already exists or uses your identity to create new accounts. A scam is when you voluntarily send money to someone, thinking you are buying something real or helping someone, but the person takes the money and disappears. In a scam, you gave permission — you just did not know you were being lied to.

The law treats them differently. With fraud, the bank usually refunds you because you did not authorize the transaction. With a scam, the bank often cannot refund you because you did authorize the transfer — you just made a mistake about who you were sending it to. This is why it is important to know the difference: if you have been scammed, your options are more limited.

Frequently Asked Questions

How long do I have to report fraud before I lose protection?

Federal law gives you 60 days from the date your statement was sent to report unauthorized charges. After 60 days, the bank does not have to refund you. Some banks offer longer windows, so check your account agreement. The sooner you report, the better — call within a few days of noticing the charge.

Will the bank refund me while they investigate?

It depends on the bank and the type of fraud. With credit cards, you usually are not responsible for fraudulent charges while they investigate. With debit cards, some banks refund you when ready and others make you wait for the investigation to finish. Call your bank and ask what their policy is before you need it.

Can I be held responsible for fraud if someone else in my household did it?

If a family member or roommate used your account without permission, that is still fraud — and yes, you can report it. However, the bank may ask questions about whether you actually authorized it, since you live together. Be clear and specific about what happened. If you want to protect yourself, remove that person's access and change your password.

What if I gave my password to someone and they used my account?

If you voluntarily shared your password, the bank may say you authorized the transaction, even if you did not intend for them to use it that way. This is why you should never share your password with anyone, including family members or bank employees. If this happened, explain to the bank that you did not authorize the specific transactions, and dispute them in writing.

Does fraud on my bank account hurt my credit score?

Fraud on an existing account usually does not hurt your credit score because the bank handles it. However, if a fraudster opened new accounts in your name, those accounts will show up on your credit report and can lower your score. Check your credit report to see if new accounts were opened, and dispute them with the credit bureau if they were not yours.