Debit Cards, Check Cards, Bank Fraud, Oh My!

April 16, 2008

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When an identity thief steals your credit and racks up charges, that is bad enough. It’s a hassle to fight the card companies and credit bureaus to prove that it’s not your charge. But what do you do when your debit or ATM card has been stolen/cloned? That’s cold hard cash coming out of your account.

You’re Covered

Enter the Electronic Fund Transfer Act. This handy piece of legislation is designed to protect you against, surprisingly enough, fraudulent electronic fund transfers.

The coverage that is provided depends on how quickly you report it:

• Within 2 business days, you are limited to $50
• Between 2 and 60 business days, you are limited to $500
• After 60 days, you are on your own

But Wait, There’s More

If your card has a logo with a Visa or Mastercard symbol on it such as a Visa Check Card or a Debit Mastercard, they limit the liability to $50 instead of what is outlined in the EFTA. If the cards are used in stores (not at an ATM), they even have Zero Liability, which as the name implies means you’d have no liability for fraudulent charges.

Monitor, Monitor, Monitor

As with many things, the key to this is to be on top of your finance. Check your bank account regularly via online banking so that you can act on any discrepancies as quickly as possible.

When you find a incorrect transaction, call the bank and then send them a registered letter so that you can prove when you reported it. They are obligated to investigate it within 10 days, and if they find an error it must be fixed 1 business day after they discover it.

Do you ever get nervous using a Check Card or other type of debit card?

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