FDIC Coverage Question

jnibori | Sep 28, 2014 | 4 posts since 2014

Hi and thanks for taking the time to review my question. I did try using Google with various keywords, however I was unable to find an answer.

My question is: Does the FDIC cover money which is withdrawn from either a bank savings account or bank checking account, if the money was withdrawn as a result of identity theft, assuming the bank is FDIC insured? In-other-words, if somebody was able to remove money from your account without your knowledge.

I am not a victim of this, however the question did come up during a discussion about identity theft issues and i presented the argument that I think we are still insured.

TIA,

jnibori

PS- On a side note, if anybody knows, would any type of standard home owner's insurance come into play either?

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Answers

lou | Sep 28, 2014 | 1,004 posts since 2010

I think the answers are no and no to both of your questions.

jnibori | Sep 30, 2014 | 4 posts since 2014

Thanks for the response.

I was under the impression that I would be covered by the FDIC, but it appears not.

IGR | Jun 27, 2023 | 580 posts since 2020

the answers to original questions are definite NO.

the follow up comments about WF are misplaced.
I am sure WF provided you best answer possible based on how the question was formulated.
The answer is in the WF and every other Depository Institution disclosures.
The answer wasn't liked not because it was incomplete but because it didn't meet the assumptions built into original questions.

Any unauthorized transaction against the Account, call it Theft for simplicity, is not a matter of Insurance. It is a matter of Liability. In case of unauthorized transaction the funds are not "Stolen" from Depositor, they are "Stolen" from Depository Institution, call it Bank for simplicity. From there it is a case of shared mutual Liability. The Bank is primarily responsible for safeguarding against Any unauthorized transaction, the Depositor is responsible of assisting the Bank with timely notification regarding possible "Theft"
(Regulation E) describes situations where Depositors Maximum Liability is LIMITED to $50-500 or Zero Liability provided that specific conditions are met.

follow up @Ltssharon concern is equally misplaced.
there is a 60 days "Timing of Consumer Notice to Financial Institution" AFTER the Statement (paper or any kind) is SENT to @Ltssharon.
HOWEVER, when @Ltssharon is Mobile Banking User, or writes the PIN on ATM card or keeps password unprotected on laptop, @Ltssharon has 2(two) days to report Theft or Loss of Phone/Card/Laptop... AFTER @Ltssharon's "learning of Loss or Theft"

Modern reality is slightly more complicated...however
Unless Depositor's gross negligence is suspected most Banks, especially as large as WF, will cover the losses rather than go into lengthy and complicated investigations in compliance with FED/FTC/SFPB Regulations....
I learn that from personal experiences

jnibori | Oct 8, 2014 | 4 posts since 2014

I received an email from the FDIC, which indicates that we are covered, although it's not by the FDIC, but rather the "Electronic Funds Transfer Act (Regulation E)."

This was their reply, verbatim:

"The FDIC protects depositors of insured banks against the loss of their deposits if an insured bank fails. The FDIC does not insure an institution for losses incurred as a result of fire, theft or fraud. These losses are not covered by FDIC insurance because they do not result in the financial failure of the bank. Unauthorized access to accounts is covered by the Electronic Funds Transfer Act (Regulation E), which provide protections to consumers against such losses. If a third party somehow gains access to your account you must follow the notification procedures your bank has established to limit your liability. You may wish to contact your bank to learn your notification responsibilities and the procedures and timeframes established by the bank and those provided by the consumer protection laws."

Ltssharon | Jun 27, 2023 | 471 posts since 2020

I only use paper, not online apps, etc. So I only get paper statements. Some financial institutions only provide quarterly statements, especially on ira accounts. So a quarter year could go by before I
notice theft of money from an account.

paoli2 | Sep 30, 2014 | 2,641 posts since 2011

I agree with Lou. FDIC insurance only money that is "in" your accounts at the time you might need FDIC replacement. That is the danger if an unknown thief gets into our bank accounts.

jnibori | Oct 4, 2014 | 4 posts since 2014

I decided to email the FDIC directly, and I'll post their reply when i receive it. I should hear back in about a week. I'm guessing that I would not be covered, but I am curious as to see what they actually say. I also submitted this question to my home owner's insurance as well, again just to see what they say.

I did check with my bank (Wells Fargo), however their answers were a bit vague. I felt that my question was a bit side-stepped, as the two answers were more centered around how my bank has all security measures in place, etc.. Nothing really about my actual question.

topkapi56 | May 5, 2017 | 48 posts since 2011

Wells Fargo gave you answers that were a bit vague? What a surprise!

mauricio | Feb 9, 2023 | 1 posts since 2023

My complain is about synchrony bank because they denied me information about my account number,bank denied I have account with synchrony bank and they never told me I got 3 account in that bank.i said they are guilty

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