Released: January 18, 2006

Help Desk FAQ

What fraud protections exist for my debit card?

Electronic transactions are governed by a different federal law than credit card charges. Regulation E, the Electronic Funds Transfer Act, does not fully protect debit card users from fraudulent charges unless the cardholder reports a lost or stolen card within two business days. On the other hand, credit card holders’ fraud losses are capped at $50 of fraudulent charges no matter when they are reported.

Because debit cards (like credit cards) can be used fraudulently by copying your authorized signature or stealing your PIN, the cards may be targeted by thieves.

Debit cards, like credit cards, can be used fraudulently and should be protected like cash. Whether a thief steals your PIN or counterfeits your signature, the person could use the card up to your daily spending limit. If you do not discover the fraud immediately, the thief could wipe out all the money in your checking account (assuming your daily limit is more than your balance) as well as any overdraft line of credit or savings-linked overdraft protection that you have.

If your card is used without your consent, dispute the unauthorized use with your bank so that it can investigate your complaint. While your bank is investigating, it will probably provide provisional credit for your losses within five days, but you might face overdraft fees for insufficient funds and be short of money in the meantime. If there is not sufficient proof that your card was used fraudulently, you could be liable the entire amount in dispute.

It’s not necessary for a crook to have your card in order to defraud you. With only a debit or credit card number, a thief can steal from your account by making purchases online or by phone. However, unauthorized online use is becoming more difficult because of a new technology that requires the billing address provided during the ordering process to exactly match the cardholder’s own billing address.