Community Bankers Association of Illinois

FRAUD ALERT: Reduce the Daily Withdrawal Limit and Reduce Exposure to Debit Fraud Losses!
12/12/08

Community banks are scaling back the daily amount customers can withdraw using signature-based debit cards in an effort to reduce exposure to debit fraud. Bankers recognize that a dramatic increase in debit card fraud nationally can adversely impact their banks and they are taking steps to protect the bank and its customers.

For example, one banker temporarily reduced the daily withdrawal limit on signature-based debit transactions from $1,000 to $500, but increased the limit for PIN-based debit transactions from $300 to $1,000.

Another banker reduced the daily withdrawal limit on signature-based cards to $300, but it only applied to customers who normally never withdrew more than $300.

If your bank decides to modify its debit card daily withdrawal limits, Regulation E requires you to notify your customers in writing at least 21 days before the effective date. Attached is a sample notification letter that a CBAI member recently sent to all customers.

Regulation E also permits your bank to modify it's daily withdrawal limit immediately in response to an existing safety or security issue, provided that you give written notice to effected customers within 30 days after the change has been made permanent by the bank.

CBAI strongly recommends that community banks review their existing debit card daily withdrawal limit policy with the goal of reducing those limits.

Let us know if you have any questions or would like to share a fraud-related story. We want to hear from you.

Sincerely,

Mike Kelley                                                               Mike Duke
CBSC President                                                     CBSC Vice President, Electronic Payments
  800.736.2224 (IL) | 217.529.2265  
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