A few months ago, I woke up to a strange transaction in my checking account – a $3,000 withdrawal from my Ally checking account to a bank account I have with a fintech company called Douugh. I didn’t realize it yet, but I was about to become – or perhaps more accurately, I was – the victim of bank fraud.
Douugh is one of those neobanks that functions mainly (or in this case, only) with a phone app. Earlier this year, I opened a Douugh account to test it out, but since then, I hadn’t done anything with it. I certainly didn’t remember initiating a $3,000 from my Ally checking account.
Alarmed at the transaction, I opened my Douugh app to see what was going on, but unfortunately, couldn’t get any further information. The Douugh app has a design flaw where they don’t show you your pending transactions. So, when I opened my Douugh app, all I saw was a $0 balance and no other information that was useful to me.
I ended up giving Ally a call to see if they could give me any insight into the $3,000 withdrawal. Unfortunately, they didn’t have any information either, but they did offer to close my checking account and initiate a dispute for me. Closing my Ally checking account was going to be a pain though – my entire financial life revolves around that account – so before doing that, I decided I better get in touch with Douugh first. Maybe they could help me.
The Customer Service Issues Begin
But that’s when I hit my first snag. When I tried to contact Douugh, I discovered that they didn’t have a phone number on their website. I managed to dig up a phone number using Google, but that number went to a voicemail that told me to send an email if I needed support. Yikes! A bank that only uses email for customer service is not good, especially in a situation like this where I needed immediate support.
With no other options, I went ahead and sent an email to Douugh customer service, figuring that maybe they’d get back to me in a few hours. I’ve sent emails to other banks in the past and have often been pleasantly surprised at how fast they respond. But there was no such luck with Douugh. It took them almost two days to respond to my email. And the response I received wasn’t helpful. All they said was that it looked like I had initiated the transfer from my Douugh account and if I didn’t want to do that, I could send the money back once it cleared. They didn’t seem to be worried about potential fraud or security concerns.
Something didn’t seem right, but at this point, I wasn’t sure what was going on or what the scheme was. After all, the money from my checking account hadn’t been moved to a third party. It was only moving from one of my bank accounts to another bank account I owned.
The Bank Fraud Happens
Two days after the initial $3,000 withdrawal, it became evident that I was the victim of bank fraud. That morning, I woke up to hundreds of random email subscriptions in my inbox. Whoever had compromised my accounts had signed my email up for every email subscription possible. A quick Google search told me that this is a standard thing bank thieves do. They clog your email with spam so you won’t notice emails from your bank.
A few hours later, the $3,000 transfer from Ally was posted into my Douugh bank account. Moments later, I received a message telling me that my debit card was reported lost and that a new one was issued to me. Then, there was a large transaction from my Douugh account. Someone was using my debit card. This was possible because when you request a new debit card in the Douugh app, Douugh immediately issues you a new card and gives you all of the new debit card details in the app. The thief didn’t need the physical debit card. If he had access to my Douugh account, he had access to the debit card too.
Once I saw this happen, I immediately contacted Douugh to try to get them to do something about the bank fraud. But of course, Douugh doesn’t have a customer service number, so all I could do was send an email and wait. It took about 6 hours before someone from Douugh finally called me. And during that time, the thieves initiated another $3,000 transfer from my Ally checking account. I didn’t have $3,000 in my Ally checking account, so that transfer overdrew my account.
It might be a bit confusing to follow, so let me recap how this bank fraud worked:
- I had my Ally checking account linked to Douugh in the Douugh app. This meant if someone got into my Douugh account, they could initiate a transfer from Ally into Douugh.
- It appears the thieves hacked my Douugh account. Douugh doesn’t have two-factor authentication, so I had no idea someone had hacked my account. They didn’t hack my Ally account (it has two-factor authentication, which makes it much harder to hack).
- After getting access to my Douugh account, the hacker initiated a $3,000 withdrawal from Ally into Douugh. Once again, I had no idea that the transaction happened because Douugh doesn’t send you a notification when you initiate a transfer.
- As soon as the money hit my Douugh account, the hacker marked the debit card as lost, then had a new card issued. Douugh provides all of the debit card info in the app, so the hacker used that info to make large transactions online.
Getting My Money Back
At this point, I was out $6,000. But what really made me mad was that this whole ordeal seemed entirely preventable. I had contacted Douugh about this transaction two days earlier. The fact that I could only contact Douugh via email was the reason why we couldn’t solve the issue before it happened.
To be fair, the customer service rep from Douugh was apologetic and said they’d make this right. First, I had them close my Douugh account. I wasn’t using Douugh anyway, but at this point, I wasn’t ever going to do business with this company again.
Next, the rep told me that Douugh would accept full responsibility for the fraudulent transactions and I’d be reimbursed the full $6,000 that was stolen. Thankfully, the $6,000 did eventually arrive. The big problem was that it took almost a month to get my money back. The money was stolen from my account in mid-October. I didn’t get the $6,000 back until well into November. By then, I had to pay my mortgage, credit cards, utilities, and any other random bills I had. Because I was out $6,000, I had to dig into my savings to cover these bills.
Needless to say, it was nerve-wracking as I waited nearly a month for Douugh to send me back my $6,000. But at least I got everything back.
Lessons Learned From My Bank Fraud Experience
This is a story about my recent experience with bank fraud, but there are lessons that you can learn here from what happened with me. Here’s what you can take away:
Two Factor Authentication Is A Must. Make sure you have two-factor authentication activated with all of your financial accounts. I’ve found that most financial institutions have this set up automatically, especially if you attempt to log in from a different computer. Douugh has a major problem in that it doesn’t appear to have any two-factor authentication option. If someone got my username and password, they could log into my account from anywhere (which is exactly what happened).
Unlink Bank Accounts If You Aren’t Using The Bank. I do a lot of bank account bonuses, so I’m often linking bank accounts and moving money between them. I’ve never really thought this would be a problem, but after this experience, I can see how a hacker could use that to their advantage. Had my Ally account not been linked with Douugh, the hacker would’ve been met with an empty bank account. But because I had my Ally account linked, they could transfer money from that account, then spend it as soon as it hit the hacked account. In the future, I’m going to unlink bank accounts if I’m not using them anymore.
Be Wary With Some Of These Neobanks. For the most part, I’ve had a perfectly fine experience with these neobanks. But it never occurred to me that there could be new fintech banks that essentially have no customer service at all. If you’re going to use a neobank as your main bank account, do your research on their customer service options. As I write this, Douugh still doesn’t have a phone number listed on their website.
Credit Cards Are Undoubtedly Better Than Debit Cards. It’s pretty clear to me that credit cards are better than debit cards when it comes to fraud protection. The problem with debit card fraud is that if you’re the victim of fraud, the money being spent is your money. While you can get it back, there’s a good chance you’re going to be without that money for some time – potentially a long time. By contrast, if you have fraudulent transactions on your credit card, you’re never going to be out the money because it’s the bank’s money, not yours.
Have A Cash Buffer. Unfortunately, if you’re the victim of bank fraud, you need to be prepared to wait to get your money back, possibly for weeks or even months. I had $6,000 stolen, which is a significant sum for anyone. And while I did get my money back, by the time I got my money back, I had already had to pay my mortgage, credit cards, and utilities. Fortunately, I have a large emergency fund and I keep a cash buffer, but if I wasn’t in that position, this delay could have been really painful for me. Build an emergency fund and have it ready. You never know when you might need it.
This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
- Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
- Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
- Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
- Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
I’m sorry to hear about your bank fraud ordeal. Your post sheds light on the importance of staying vigilant with our finances. Wishing you a swift recovery and thanks for sharing your experience.
OMG what a nightmare. I would have been seething and not sleeping for that whole time it took to get it worked out. Would it have helped to keep lower balances? I have an account with N26, which is also and online, app-based bank, which makes me a little uncomfortable. But I keep a low balance and only have it linked to another bank account that also has a low balance. Kind of sad all the hoops we have to jump through just to keep ourselves protected isn’t it? Glad your situation worked out!
How do you think they got into your account in the first place? Breach from another company that exposed login info? Or login info that’s the same between accounts? I spend a lot of time changing all my wife’s passwords to unique ones from the 1 password she used at every website. That took FOREVER.
I opened an account with Discover Bank online for the bonus and someone wired out $15K. It took 11 months and over 50 phones calls to get it back. They said I authorized it! Totally frustrating experience. On a wire transfer there is no limit of time they can take to investigate.
Oh man! Glad you got it worked out. This is exactly the reason why everyone needs to take their online security very seriously. More stuff like this will happen, especially with Crypto where you are operating with uninsured accounts. 2fa is a must, but you also need to use strong, unhackable passwords that are different for each account. I recommend a password manager like LastPass, Keeper Security or something similar. It is literally some of the best investment you can make. I also have some other advice here: https://accidentallyretired.com/resources/keep-your-money-investments-and-cryptocurrency-secure/1316
Stay safe out there everyone!
Yikes, that’s scary. I’m curious that you can’t prevent this on the Ally Bank side.
I have 2 credit union accounts. I transfer money from the old account to the new account, but I have to log into the account that’s *sending* the money and *push* it to the receiving account. I can’t log into the *receiving* account and *pull* it from the sending account. At least that’s what I was told when I set up the 2nd account.
Maybe you can set up something on the Ally account so that you’re notified when another account tries to pull money from it, even if it’s linked.
Thanks for sharing, quite harrowing…..experience, I will double check all my accounts to be two factor authentication. That helps!
Glad you were able to get everything back. Could this have been prevented if you change your account login for Douugh after the first transfer or were you locked out of your account?
When I saw the transfer, I did log into my Douugh account and changed the password. But it didn’t seem like it did anything. Seems like once they got access to the account, they stayed logged in even when I changed the password.
That makes me think their web facing software and security are sorely lacking.