Your Debit Card, and Your Rights
Debit cards are governed by different Federal laws than credit cards, and some of the rights and protections enjoyed by credit card holders are not the same for debit cards. This guide provides information about how debit card users can protect their cards, avoid losses, and dispute transactions. Debit cards are a great way to pay — just make sure to protect your card and use it properly.
Protecting Your Debit Card Information
Your debit card or prepaid debit card is basically an “access device” that lets you (and, unfortunately, in some situations, thieves), get access to the funds that are on deposit. For a debit card that is linked to your bank account, your ATM card, check card or debit card allows access to the funds you have available in your bank account. For a prepaid debit card account, the card gives you access to the amount of funds you “prepaid” in the account associated with the prepaid card. These cards make it easy for you to access, use and withdraw your money. Don’t make it easy for thieves to do the same. You can protect your card and money by taking a few simple precautions.
- Keep track of your card. If you lose track of your card, report it immediately. Assume the worst, and report the loss of your card to the bank that issued it. You can always get a replacement card, but you may not be able to replace the money lost if someone gains access to your account (see the section on what to do if your card is lost or stolen, below, to find out what your liability might be).
- Protect your password and PIN. It’s just common sense. Don’t write your PIN down in your wallet or purse where it can easily be found. Memorize your PIN, and don’t use a number that is easy to guess (like “1234”, or your birthdate, or last four digits of your social security number). Try to make things at least a little difficult for thieves!
Lost or Stolen Debit Card? Here’s What to Do
Your liability under Federal Law for unauthorized use of your ATM card, debit card or prepaid debit card depends on how quickly you report the loss. If you report an ATM or debit card missing before it’s used without your permission, the Electronic Funds Transfer Act (EFTA) says the debit card issuer cannot hold you responsible for any unauthorized transfers. If unauthorized use occurs before you report it, your liability under federal law depends on how quickly you report the loss.
For example, if you report the loss within two business days after you realize your card is missing, you will not be responsible for more than $50 for unauthorized use. However, if you don’t report the loss within two business days after you discover the loss, you could lose up to $500 because of an unauthorized transfer. You also risk unlimited loss if you fail to report an unauthorized transfer within 60 days after your bank statement containing unauthorized use is mailed to you. That means you could lose all the money in your bank account and the unused portion of your line of credit established for overdrafts. However, for unauthorized transfers involving only your debit card number (not the loss of the card), you are liable only for transfers that occur after 60 days following the mailing of your bank statement containing the unauthorized use and before you report the loss.
If unauthorized transfers show up on your bank statement, report them to the debit card issuer as quickly as possible. Once you’ve reported the loss of your ATM card or debit card, you cannot be held liable for additional unauthorized transfers that occur after that time.