Ok, the unthinkable happened. You wake up one morning and get a cup of coffee on your way in to work. You swipe your debit card, there’s a pause, and DENIED flashes across the screen. Denied for a $2 coffee? How can that be? Embarrassed, you leave the coffee and slink out of the shop. You get into work and check your account online, only to find that you now have -$83.65 in your bank. You’ve been hit with debit card fraud.

Many people are surprised to learn that most debit card fraud occurs when the card owner still has the card in their possession. I certainly was surprised when I had to leave the coffee steaming on the counter and found that someone in California bought an X-Box with my money. Follow the tips in the Debit Card Fraud Prevention article to make sure this doesn’t happen to you. But if you’re like me and this has happened to you, keep reading to see how you can get your money and life back on track.

Do Some Detective Work
The best weapon you have against fraud is information. Check your bank account online to see what is going in and coming out. As soon as you see something weird, note the date it happened and the exact amount, and most importantly, where. If something was bought in New Jersey and you live in New Mexico, you might want to take a closer look.

Tell Your Bank
As soon as you think you’ve been defrauded, tell your bank. Each bank has different methods for dealing with fraud, mine had me fill out an affidavit stating that I did not authorize the transaction. This may be a long and tedious questioning process, but you have to realize the bank is going to end up paying you back your money and taking the fraud as a loss, instead of you. Therefore they want to make absolutely sure you’re telling the truth, and not just trying to get out of paying a big bill. This process can take up to 10 days while the bank researches the transaction to make sure that it was fraudulent.

Do it Fast
There is a limited amount of time between when a fraudulent transaction occurs, and when you can get reimbursed for the funds. Federal law states that a customer is liable for a maximum of $50 if they report the fraud within two business days, $500 if reported within 60 days, and unlimited amounts if reported after 60 days. Most banks, if the fraud is obvious and the customer is in good standing, will cover all funds that were stolen, but only after an investigation period.

The keys to recovering from fraud are information and communication. You have to arm yourself with knowledge not only of the comings and goings of your own accounts, but also the laws governing fraud. Once you are conscious of these things, getting in touch with your bank and staying in touch with them will expedite your recovery immensely.

Debit card fraud is sometimes lumped into the same category as credit card fraud, but the two are very different. Debit cards link directly to your money, your real cash, and recovering those funds is a long and tedious process. Here are a few simple things you can do to shield yourself from debit card fraud.

Use the internet or automated phone service to keep tabs on all your accounts.

Checking the balance in your checking account every other day will arm you with the best defense against fraud: information. The more familiar you are with the comings and goings of your account, the quicker you can spot something fishy.

Don’t use your debit card for purchases at places you don’t trust.

If you’re unsure about the security at a place of business, use your credit card or cash to pay. A credit card doesn’t suck the funds from your bank account immediately like a debit card, so it gives you some time to check and make sure everything is alright before paying off the balance. This applies for online purchases as well. Treat websites the same way you would treat brick and mortar businesses, if it looks untrustworthy, don’t trust it!

Hold on to your card

Most restaurants are fairly trustworthy places, however it is an ideal environment for a devious waiter to make off with your card number. When you give them your card to pay the check, they take it back to the register, usually out of sight, and run the transaction. This gives them plenty of time to copy your number, your signature, even the little security code on the back.

Spread out your money

Don’t link all your accounts to your debit card! If someone gets hold of the number they can completely clean you out. Instead, have a small savings account that can only be accessed by the old fashioned human teller at a bank branch. That way if your checking gets wiped out, you still have some cash in your savings. This is important, because the bank could take up to 10 days to investigate your claim, and they won’t refund you until that time is up.

While using debit cards may sound insecure and dangerous, the reality is that with a little precaution and knowledge, they can be excellent tools. Banks are starting to emplace more safeguards on debit cards, such as transaction amount limits. These limits can be lifted for certain authorized transactions if you contact your bank, but in case your card number falls into the wrong hands, the thief can only take a certain amount out in a 24 hour period.

People looking to build and grow their money are finding it a bit difficult in the current American market. The stock market is more volatile than ever, and the impacts of those ups and downs don’t just affect our investment portfolios, but how much we pay for bread, milk, and gas every day. Investing the money we work so hard to earn in something like that is a frightening prospect, not to mention hard to do in the first place. Saving up enough money to buy stocks might take people a lot of time and effort, and when they finally have enough to buy a stock, it might plummet overnight and lose that person all their money.

While investments in stocks and international markets might be an option for people with a bit more “extra” cash lying about, most of us are saving a few dollars at a time, if at all. For people like us, these funds need to stay at least partially liquid (meaning we can spend it if we need to). We can’t wait for our CD to mature when emergencies occur suddenly and without warning. What then, is the solution?

A good ol’ savings account.

But not just any savings account. Online savings accounts, FDIC insured and high yield with limited to no prerequisites. These accounts are usually with large banks that can afford to give you much higher interest rates than so called “brick-and-mortar” institutions. But how do they work, are they safe, and where do you find them?

Is This a Scam?

Usually the first assumption made by jaded and cynical people like myself is that this is too good to be true. How can banks offer such high yield accounts with almost no minimums, and do it online? There’s a catch right? Upon further investigation, I learned there was nothing to fear. As a matter of fact, the more fine print I read, the more excited I got.

The banks that are offering these kinds of accounts are large banks, usually with very diversified interests in American markets. ING, HSBC, and Capital One to name a few. These banks have such a large asset base, they can afford to offer such high interest rates. Here is the current rundown of some online savings accounts:

• HSBC - 3.05%, no minimum balance, no fees
• E*Trade - 3.01%, no minimum balance, no fees
• ING Direct - 3.00%, no minimum balance, no fees
• Emigrant Direct - 2.75%, no minimum balance, no fees
• Countrywide Bank - 4.05%, $10,000 minimum balance, no fees
• Capitol One - 3.75%, $10,000 minimum balance, no fees

Is It Safe?

One of the first things you should look for when shopping for online savings accounts is the FDIC seal on the website. This is extremely important, as this delineates a real bank from an uninsured investment firm, or even worse, an outright scam. FDIC is insurance for your money, backed by the Federal Government. It gives you insurance on up to $100,000 for a deposit account in your name. More on FDIC insurance later.

You might ask, what about security? Most of these websites are very secure, with a lot of different password requirements. Also, in order to open one of these accounts, you will need an existing checking account at an existing brick and mortar bank. The online banks assume that your identity has been verified at your existing bank already, otherwise you wouldn’t have a checking account. In order to verify your checking account, the online bank will make two small deposits into it (a few cents each). You then need to respond back to the online bank with the exact amounts of the deposits. This is how they know your account is active and in your control (don’t get excited, they take the money back).

Sign Me Up!

Sound good to you? Shop around and see which account works best for your needs. Keep in mind the rates are variable, which means that as the markets change, so can your interest rate. Keep up to date on the latest offers so you don’t miss out.

Around tax time all kinds of fraud are reported, mostly people posing as the IRS on the phone and phishing for personal information to “confirm the information disclosed on your tax filing.” The new twist this season is using the Stimulus refund to gain access to your personal information.

Because this is not the usual refund most people expect, they are more susceptible to fraud surrounding it. Scammers will make calls to people, posing as the IRS and asking them to confirm their information so they can receive their Stimulus checks. Usually they are asked for their bank account information. When people hesitate, they are told that the only way they will receive their check is to disclose their account number. People might also be asked to disclose their social security numbers, addresses, driver’s license numbers, loan information, health insurance information, and more. These scammers will then take this information and open up credit cards, clean out bank accounts, or even file fraudulent tax returns in your name.

The same precautions that will save you from other tax scams will save you here as well. The IRS never sends unsolicited e-mails or phone calls, so treat any with caution. Call the IRS at 1-800-829-1040 to confirm any correspondence you receive. E-mails from the IRS might seem unusual, but now that more and more people are filing electronically, and having their refunds directly deposited into their bank accounts, e-mails asking for confirmation of your routing number and bank account are more believable.

These emails can be more dangerous than you think. They often look very official, with IRS seals and fine print on the bottom of the message, all in an attempt to lend credibility. These messages often have a link that you click to find out more information about “special rebates.” Clicking on these links at all, even out of idle curiosity, will download malicious software that allows hackers access to your computer and any personal info you have on it. So if it seems too good to be true, don’t click on the links “just to see.”

The cousin of the refund email scam is the audit email scam. This method uses scare tactics instead of the promise of money. The victim receives an email saying that they are being audited, and they must follow a link to a “secure” site to provide information. This of course instantly downloads the same software as before, and as a bonus any information you input into their website is now theirs to do with as they please.

Taxpayers have received more than 33,000 of these scam e-mails, reflecting more than 1,500 schemes. If you receive one of these emails, forward it to phishing@irs.gov to report it.