U.S. and U.K. Comparison of Debit Card Protection

March 2, 2008

United States

Debit Cards
Since your debit card is tied to your checking or savings account, if it’s lost or stolen and someone else uses it, the consequences could be financially devastating. The amount of fraudulent charges you could be responsible for depends on how quickly you report the card lost or stolen to the issuing bank.

If you determine that your card has been lost or stolen and report it to the issuing bank within 2 days, of discovering the loss, youíll only be held responsible for up to $50 of fraudulent charges made on your card.

If you report the card lost or stolen in 2 - 60 days, you can be responsible for up to $500 in fraudulent charges.

If you wait more than 60 days after receiving a bank statement that includes an unauthorized transfer, you can be held responsible for an unlimited amount of fraudulent charges on your card, but you will not be held responsible for any funds withdrawn after you notify your bank that the card was lost or stolen.

Debit cards with the Master Card or Visa logo offer a higher level of protection for some consumers. Visa and Master Card have both placed a voluntary limit of $50 on debit cards bearing their logo where the transactions are signature based. Although many banks have started to implement voluntary plans to limit customer’s liability to $50, there is no federal law regarding this issue.The key to protecting yourself when you suspect that your stuff has been stolen is acting fast! The Federal Trade Commission offers an excellent resource that can help you respond quickly in case your wallet or purse is stolen.

Credit Cards Credit card companies are held to strict liability laws; the law limits consumer liability for credit card fraud to $50. For example if you notice suspicious charges on your credit card statement such as double billing or an incorrect charge, the credit card company is obligated to investigate if you send in a written request within 60 days.

UK

Debit Cards

In the case of your debit card being lost or stolen you should notify the issuing bank or building society as if someone uses your card before you report it lost or stolen or that someone else knows your PIN you will have to pay £50 in total (and not for each transaction.) See Banking Code.

Credit Card
If your credit card has been lost or stolen you must notify the credit card company straight away.
In the meantime the card has been used to purchase goods over the telephone. However much has been spent, you’ll be entitled to have the full amount but this will be recredited. Alternatively, if the card had been used to buy goods from a local department store (say for £250) you’ll be liable for £50, but no more.

Credit Cards

When you get a new credit card, keep the credit card agreement in a safe place and remember where you have put it.

As soon as you discover that your card has been lost, stolen or otherwise missed, notify the credit card company (for example, by telephone).

Check whether you need to confirm notice in writing within seven days.

If you decide to stop using a credit card account, don’t simply throw away the card: cut it up.

Check your statement carefully each month. Review your statement carefully. Do all the charges look correct? Have any required credits been applied? Are there any unusual or unexpected charges? Your credit card company will correct legitimate errors, but only if you bring them to their attention in a timely manner before you pay your bill.

Shred old credit card receipts. You can purchase an inexpensive paper shredder at an office supply store. All old receipts with your credit card number and any unneeded documents with your national insurance number or other sensitive personal information should be shredded before disposal. This prevents the common practice of criminals going through the rubbish to find receipts and stealing your identity.

Debit Cards

The best way to prevent fraudulent charges on your card is to keep your card and account numbers out of the hands of thieves. Identity thieves are extremely sophisticated and they donít need to have the physical card to drain your account, all they need certain information from the card. Here are some steps that you should take to protect yourself from card thieves.

Be aware of your surroundings. If you use your debit card at an ATM machine, make sure that youíre aware of who is around you and shield the keyboard with your body when entering your personal identification number (PIN).

When using an ATM, make sure that the area is well lit and is in view of passing traffic. Donít use an ATM in an area you feel uncomfortable in.

Check out the ATM machine. If there is a transparent overlay on the ATM keyboard donít use the machine. ATM thieves use keyboard overlays to capture PINs. Also, if there is a detached card reader next to the machine take your business elsewhere: these devices are used to capture debit card data.

Don’t use your debit card for online purchases, use your credit card. If online thieves get your debit card information they can drain your bank account; if they get your credit card information they can only make charges up to the credit limit of the card. Itís much easier and less costly to dispute credit card charges than charges than withdrawals from your bank account.

Remember your PIN number - donít write it down or give it to anyone not even a member of staff at the issuing bank.

Do You Have The Best Card in Your Pocket?

To get a prepaid card in the U.K., Click Here. To get a prepaid card in the U.S. Click Here.

While you’re at it, in the U.S., complete a free card finder search online to make sure you’ve got the best card for you.

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