After the first $50, no. Since 1974, the Fair Credit Billing Act has protected consumers from the responsibility of covering fraudulent purchases and stolen cards. According to the old law, the most an individual can be charged is $50 worth, provided they dispute the charges within 60 days. Most cards have adopted more lenient practices where the cardholder ends up responsible for nothing: “zero-liability” policies.
Debit cards carry more consumer liability than credit cards.
For unauthorized debit card purchases the consumer can be held liable for $50 if they report within 48 hours, up to $500 for reporting between 48 hours and 60 days, and liable for the full amount when reported after 60 days. Even if funds are being returned, the bank’s investigation and possible refund will take some time. It’s important to account for the low balance before adding insult to injury with insufficient fund fees and bounced checks.
Because the debit card consumer protection laws are looser, it’s wise to limit usage. Each time you put a card’s digits out in the environment, you run a small risk of having the data intercepted.
Reality check: you still get to pay for it.
The hidden cost is the reality that fraudulent transactions end up costing everyone money. Banks, credit card companies, merchants, and the insurance companies that cover them pass along every lost cent to the consumer. Rising crime rates mean higher premiums, prices, and fees. In 2019, the Federal Trade Commission reported total credit card fraud losses of 135 million.
The consumer-credit reporting agency Experian recently published a study on how inexpensively sensitive personal information can be purchased on the dark web. They found that working credit card numbers with CVV were only $5. For $30, purchasers get a more complete package: credit card number, CVV, banking information, social security number, and birth date. These crimes are cheap to commit, easy to pull off, and difficult to catch. Low risk, high reward.
The experian data highlights the fact that phony credit-card transactions could be the canary-in-the-coal-mine that warns of larger, more devastating identity theft crimes. Compromised data is sometimes sold to thieves in packages. Remaining vigilant means checking statements, monitoring credit reports, and avoiding public networks or non-secure websites.
What happens when banks refuse to cover my lost funds?
A bank or credit card company could have a number of reasons to deny your claim and offer no refund. They may contend you were negligent in protecting your credit card information by using it in a public place or failing to secure a mobile device. They might believe you were in on the scheme and somehow benefited from the crime.
Such are the grounds for refusing to honor a “zero-liability” policy. The burden of proof lies with the bank, who assuredly has a legal team knowledgeable in navigating the nuances of the court. The method of fighting back isn’t as simple as suing them for the lost amount. The best course of action is to work with an attorney versed in debt defense and consumer protection law. They can help you file complaints with the appropriate federal entities and object to the bank’s claims in the appropriate manner.
For victims of identity theft, crimes of fraud, or false claims of debt, consider working with the attorneys at The Law Offices of Jeffrey Lohman. Our team of consumer protection lawyers have a long tradition of helping clients against allegations that destroy their credit or reputation. Get help from our staff today.