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FDIC Coverage Question

jnibori   |     |   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My question is: Does the FDIC cover money which is withdrawn from either a bank savings account or bank checking account, if the money was withdrawn as a result of identity theft, assuming the bank is FDIC insured?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.



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

lou   |     |   653 posts since 2010
I think the answers are no and no to both of your questions.
jnibori   |     |   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.
jnibori   |     |   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." 
paoli2   |     |   2,212 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   |     |   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.