These days, most people carry a debit card with them in place of cash to pay for purchases when they do not want to run up their credit cards. In fact, 185 million people in the United States are debit cardholders using over 5 billion debit cards. Your money is one of your most valuable resources, so it’s important to understand a few things about how it works when using plastic.
DEBIT V. CREDIT
It’s just an ordinary day at the grocery store checkout lane or at the gas station and you have to make a payment. You reach for your bank card, the one with a Visa or Mastercard logo, and stick it into the card reader slot. This card, as you probably know, allows you to use the money that is sitting in your checking account. Suddenly, the card reader presents you with two options: Credit or Debit. You may consider these to be interchangeable since they are both going to withdraw money from your account, but you may not know that the process is different depending on which button you press.
When you select “debit” on a card reader, you are prompted to enter your personal identification number, or “PIN.” This method allows you to see the purchase right away on your statement (if you check online) and it instantly withdraws the cash. It is helpful to people who have little self-control with credit cards or need cash back; however, when you insert your PIN, or Personal Identification Number, you are actually opening that up to the possibility of having your bank account info stolen by hackers as the PIN is then kept in the point of sale device’s memory.
If your account is hacked into, criminals can make use of your cash instantly. There is no 3-5 day processing period to notice suspicious purchases on your statement. Debit purchases are processed through an Electronic Funds Transfer, or EFT system that does not provide protection like Mastercard or Visa.
These days, the average credit card debt is over $15,000. It’s important to watch carefully for any fraudlent purchases. When you make a purchase with your bank card and select “Credit” the purchase still is deducted from your bank account, but it takes longer to process as it goes through the Visa or Mastercard network. It also allows you to sign for your purchase rather than give up your sensitive PIN. There is added peace of mind in knowing that credit card companies like Visa offer zero liability policies in which you are not responsible for fraudulent charges. If you dispute a charge they simply remove it from your statement.
If you were to have your money deducted fraudulently from your bank account because someone stole your PIN, it would take much longer to recover any of the damages, up to 90 days to resolve the issue as the bank has to perform an investigation after you report the unauthorized transaction, which you must do within 2 business days.
WHAT HAPPENS WITH UNAUTHORIZED DEBIT TRANSACTIONS?
When you lose your bank card or have your PIN stolen and you report it to the bank within two days, the bank can’t hold you responsible for more than the amount of any unauthorized transactions, or $50, depending on which is less. If you wait longer than 2 days to notify your bank about the loss, you could be responsible for up to $500 of unauthorized transactions. Finally, if you wait longer than 60 days you will have to pay for all the unauthorized transactions. In the end, you are still paying for charges that you did not make!
If you are a victim of credit card fraud or credit card debt, you need a determined consumer protection lawyer on your side. Jibrael S. Hindi specializes in consumer protection law and works closely with you to learn the details of your case to guide you to the best possible legal outcome. Call Jibrael today at 844-JIBRAEL or contact us online for a free in depth consultation.