Robert Siciliano Identity Theft Expert
Not all plastics cards are created equal. The major differences in credit vs. debit is in the protections (or lack of protections) that come along with the fine print. A debit card is connected directly to a person’s bank account and when compromised can devastate your bank balance.
I know too many people who’ve fallen victim to some type of debit card fraud whether through skimming or unauthorized purchases and never recouped their losses. Sometimes the banks just won’t budge. They tend not to believe a person who’s PIN and card number was leaked.
Creditcards.com reports The Federal Reserve’s Regulation E (commonly dubbed Reg E), covers debit card transfers. It sets a consumer’s liability for fraudulent purchases at $50, provided they notify the bank within two days of discovering that their card or card number has been stolen. TWO DAYS. That’s it! After that, the maximum liability jumps to $500. Some banks will extend the grace period up to a year, but good luck getting your money back.
Federal laws limit cardholder liability to $50 in the case of credit card fraud, as long as the cardholder disputes the charge within 60 days. And if a victim doesn’t discover or report the fraud until after 60 days have passed, the liability could be the entire card balance, for a debit or credit card. Once your debit card is compromised, you might not find out until a check bounces or the card is declined. And once you do recover the funds, the thief can just start all over again, unless you cancel the account altogether.
Don’t use a debit card. Use credit cards and pay attention to your statements every month and refute unauthorized charges immediately. I check my charges online once every two weeks. If I’m traveling extensively, especially out of the country, I let the credit card company know ahead of time, so they won’t shut down my card while I’m on the road.
Protect your identity.
1. Get a credit freeze and follow the steps for your particular state. This is an absolutely necessary tool to secure your credit. In most cases, it prevents new accounts from being opened in your name. This makes your Social Security number useless to a potential identity thief.
2. Invest in Intelius identity theft protection and prevention. Not all forms of identity theft can be prevented, but identity theft protection services can dramatically reduce your risk. (Disclosures)
Robert Siciliano Identity Theft Speaker discussing Debit Card Fraud on CNBC
1 user commented in " Why Debit Cards Are a Nightmare "
Follow-up comment rss or Leave a TrackbackThis i had done to me,when my purse was snatched in 2005,i even have outstanding loans that had been taken out in my name.The debit card account had been drained,an overdrawn.It took me forever to get it straight.They caught the driver,An the purse snatcher 2 weeks after i reported it.one jumped bond.The one who snatched the purse went to Canada,an broke into a drug store he got 25 yrs there,so who knows if he will ever be brought back here for trial.The woman driver she did a deal,an got out of everything.An she looked so much like me, If she had dyed her hair.im sure she was the one who took out the loans,with my id.An im still fighting in 2010 to get things,cleared up.including one account from debit card.One was cleared up,swiftly.I just think it has to do with the bank that was used.Each are different.But many are wrong towards a custmer who has a fraud case on their hands.
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