Debit cards are increasingly being used as an alternative to credit cards. Carrying a Visa or MasterCard logo, these cards are accepted in the same places that accept credit cards. However, many consumers are unaware that debit cards do not carry the same protections as credit cards. Provided here is a brief guide to the unique issues involved with debit cards.
While a credit card transaction may be disputed up to 60 days after receiving the incorrect bill, a debit card has much more stringent reporting requirements. Consumer liability for fraudulent transactions is limited $50 only if the dispute is made within 48 hours of receiving the bank statement on which the transaction appears.
If the dispute is made more than two days after receiving the bank statement, liability is limited to $500. If the dispute is reported more than 60 days after the bank statement is received, the consumer may be liable in full for any fraud that occurs after the first 60 days.
Visa adopted a “Zero Liability” policy in April 2000, but notes that consumers may still be help liable by their financial institution if the consumer delayed reporting unauthorized transactions for an unreasonable time. MasterCard also has a “Zero Liability” policy, but it has several exceptions, such where the consumer has not used “reasonable care” in safeguarding the card, or has reported two or more unauthorized transactions within 12 months.