Checking Account Fraud Increasing

As reports increased of unauthorized electronic debits, the electronics payment association tightened its rules last summer, requiring banks that use its automated clearing system to more vigorously question companies that had high rates of consumer charge-backs. Now, if more than 2.5 percent of a company's monthly transactions are rejected by consumers, a bank is required to investigate. And if the charge-backs remain high, banks should stop processing that firm's automated payments.

A sidebar article provides suggestions for consumers re: watching their bank accounts for unusual activity.

Banks are supposed to refund money for unauthorized transactions. For improper electronic debits, consumers are supposed to protest within 60 days after a bank statement with the error was mailed. Then, the bank has up to 45 days to investigate and resolve the complaint, but must return any funds within 10 days if the probe is not completed by then.

For unauthorized paper checks, some banks limit the time consumers can bring challenges to as little as 30 days after a bank statement was mailed. Banks may also demand proof the charge was not authorized.