The Reason Reporting Suspect Charges on Debit Cards Matters and Why You Should Care

by Bill on January 7, 2014

Big MoneyFraudulent charges on either debit or credit cards cause similar trouble; but the laws protecting debit cards and credit cards are not. Here’s why reporting suspect charges on debit cards matters.

Different Laws for Different Cards

The Canadian Banking Association (CBA) is a banking association where the banking industry allows for zero responsibility should a debit card be part of a fraudulent case. They have also begun, as of this posting, to move into chip-based technology similar to that of Europe; making it harder for software to skim information from the card.

In the U.S. the Fair Credit Billing Act limits your responsibility to the first $50 of each unauthorized charge. Another part of this law allows you to get around even that if you report the card lost before any unauthorized charges show up.

But what if you still have the physical card, but the numbers or information were stolen (like in the Target fiasco that hit 40 million people)? By law you are not liable for any charges deemed fraudulent in this case.

For debit cards there is the Electronic Funds Transfer Act which limits liability against unauthorized use of debit cards and ATM bank cards.

The Lending Code (part of the Consumer Credit Act of 1974) from the UK allows for coverage from unauthorized use up to £30,000 and the most you would pay is £50 (similar to the U.S. value)

Does Reporting Suspect Charges on Debit Cards Really Matter?

In a word, yes. The Electronic Fund Transfer Act has a window of 60 days after receipt of the statement with the unauthorized activity. If you don’t get to the bank and take action within that time, you are now liable for all activity regardless.

It should also be said that most credit cards will have policies and guidelines allowing a certain time frame to report fraudulent charges. Make sure you know what these time lines are with your card. I can’t stress this enough; know your rights and responsibilities with your credit cards!

How to Find Suspect Charges on Your Bank card

Four things can help you avoid suspect charges on debit cards and credit cards. All four are time sensitive (meaning they should be done as soon, and as often, as possible).

  • Check your account statements regularly for suspicious activity. Look over each transaction, making sure you either remember it or have a receipt for it.
  • Balance your checkbook against the bank statement the day you get the statement. With credit cards, check receipts against items on the statement until it all matches up.
  • Each year you are allowed one free credit report by law. Each of the three credit reporting agencies must provide one upon request under this law. Stagger the requests over four month periods so you have a fresh report three times each year. Then check each report carefully for problems.
  • If someone calls you asking to verify information, or tells you your card is inactive and you must call a number to reactivate it – DON’T. Hang up and notify the bank or card issuer as soon as possible to report potential fraud.

Remember debit cards are not treated the same as credit cards by the banks. They may look the same, act the same, and buy the same things – but they are different when it comes to dealing with fraud.

Got a story to tell about dealing with suspect charges? Chime in.

William Swan, writer

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