| More and more consumers are using debit cards | | | | liable for up to $500. If you report fraudulent use of the |
| instead of credit cards for daily purchases. The | | | | card more than 60 days later, you risk unlimited liability. |
| number of locations and situations in which you can | | | | Yes, unlimited liability. That means that if you wait two |
| use a debit card has increased significantly and many | | | | months before reporting the fraud, you could have |
| people prefer to pay as they go, rather than racking | | | | your entire account cleaned out and be liable for it. If |
| up a credit card balance and incurring interest fees. | | | | you are choosing a debit card, look carefully at the |
| From 2003 to 2008, debit card use grew from 47.7 | | | | policies that company has around liability; Visa, for |
| percent of plastic-based purchases to 58.9 percent. | | | | example, has a helpful Zero Liability program. |
| The Nilson Report, a newsletter that tracks the | | | | It is Important to Report Debit Card Fraud Quickly |
| consumer payment industry, predicts that this number | | | | This potential unlimited liability means that it is very |
| will go past 67 percent by 2013. | | | | important to report fraud quickly. If you think you've lost |
| This rise in debit card use has attracted the attention | | | | your card, or suspect a fraudulent use of your card, |
| of thieves. As the use has gone up, so has fraud. | | | | report it immediately. The risk of someone cleaning out |
| There are a number of things you can do to prevent | | | | your account, and being liable for it, outweighs the |
| and deal with bank debit card fraud. Before we look at | | | | inconvenience or embarrassment of discovering your |
| them, it's important to know the difference between | | | | card was actually in a drawer, or that what you |
| credit card fraud and bank debit card fraud. | | | | thought was fraud was just a purchase you forgot |
| The Difference between Credit Card Fraud and Bank | | | | about. |
| Debit Card Fraud | | | | Reporting a lost or stolen card quickly will also keep |
| One major difference between credit card fraud and | | | | you from being charged for any checks that might |
| debit card fraud grows out of the different ways the | | | | bounce on your emptied account. |
| two types of cards work. When you use your credit | | | | Tips for Avoiding Debit Card Fraud |
| card, you establish a balance with the credit company | | | | One of the simplest is to keep careful track of your |
| that accrues interest until you pay it off. Using a debit | | | | card itself, as well as withdrawals made from your |
| card takes money directly out of your bank account. | | | | account; have your bank's phone number safely |
| So, if you identify a fraudulent use of your credit card, | | | | stored in a separate location, so that you can |
| the balance remains unpaid while the credit company | | | | immediately make a call if the card goes missing, or an |
| investigates the fraud. But with bank debit card fraud, | | | | unexpected withdrawal shows up. |
| the money has been removed directly from your | | | | Unfortunately, thieves have worked out ways to |
| account - and you won't get that money back until the | | | | commit debit card fraud without actually stealing your |
| fraud claim is resolved. Even if the claim is resolved in | | | | card. One of the most prevalent is called "skimming," in |
| your favor, you could be out the entire balance of your | | | | which thieves set up equipment that captures |
| account for weeks or months while the bank | | | | magnetic stripe and keypad information when you |
| investigates your claim - a major inconvenience, | | | | input your PIN at ATM machines, gas pumps, |
| especially if you have immediate bills to pay. | | | | restaurants, or retailers. Experts on skimming advise |
| Different Liability Rules for Credit Card Fraud and Debit | | | | consumers to avoid using their card at gas pumps, to |
| Card Fraud | | | | only use ATMs located at banks (which are harder to |
| Another major difference between credit card fraud | | | | hack into and are under better surveillance), and, again, |
| and debit fraud is that there are different federal rules | | | | to keep a close watch on your bank account. |
| covering liability with each type of card. With a credit | | | | Smart thieves who get access to your bank account |
| card, your maximum liability for fraudulent use of your | | | | will start with small withdrawals to test the waters, and |
| card, even if the card is used before you report it | | | | if that initial debit card fraud goes unnoticed, will quickly |
| missing, is $50. If the loss involves your credit card | | | | move on to bigger purchases and emptying your |
| number, but not the card itself, you have no liability at all | | | | account. |
| for unauthorized use. | | | | To avoid fraud, and minimize your liability should it |
| The rules for liability around debit card fraud can be | | | | happen, it's worth getting in the habit of watching your |
| punishingly different. It's individual company policy, not | | | | account closely - a habit which can also be good for |
| federal law, which determines your liability. In general, | | | | your budget. It's also good practice to make sure you |
| your liability depends on how quickly you report noticing | | | | have enough money to cover a few months of |
| that the card is missing, or noticing that there has been | | | | expenses in your savings account, in case you do fall |
| fraudulent use of the card. If you report the loss within | | | | victim to debit card fraud and have to wait for your |
| two business days, your maximum liability for | | | | claim to be resolved. |
| fraudulent use is $50. Beyond two days, you could be | | | | |