Fraud Protection: Debit Versus Credit Cards

Reader Comments
Back to blog

Being a regular online shopper, I always use credit card. But just to be very sure about my security I did some research about some powerful tools to prevent credit card fraud successfully. And then, I came across with one of the most effective and powerful security solution offered by TeleSign whose phone based authentication and verification ensure the complete safety of your personal details to get hacked.
TO read more about their services visit http://www.telesign.com/use-cases/protect-account-access/

Laura Deitch of CA 6:27AM December 14, 2011

I cannot speak on how it works for debit cards, but I work for a major bank in credit card services and I can only assure you that, signature or no, if fraud is determined to have been committed on a cardholder's account, the amount is "charged back" from the merchant. The merchant loses the funds and the cardholder recovers them, regardless of whether or not the merchant has a signed sales slip. In cases of confirmed fraud, the banks are authorized to reverse the charges against the merchants, since generally the actual fraudster is long gone.

Jason of NC 2:32PM June 14, 2011

basejumper1000
Your wrong. If the merchant provides a receipt with a signature ( no matter what it looks like) the financial institution is then responsible for refunding the money. The merchant does not have any responsibily then.

NOBODYS BUSINESS of PA 4:01PM November 22, 2010

John from NJ, your assumption is logical but not the case. When the customer reports a transaction as fraudulent, if the signature of the customer at time of purchase doesn't match the lawful owner of the card then the CC company has the ability to take the funds back from the retailer in question. Thus, the retailer has basically given the product away for free.

Les ecker of CA 5:09PM April 21, 2010

When a mastercard debit/credit is fraudulent and presented at a point-of-sale with a forged signature, why isn't the merchant responsible for not obtaining an ID to verify the signature? It appears that the issuing bank has to take the loss for an invalid signature and the merchant only has to present a copy of the sale agreement with any type of signature.

John Carsone of NJ 12:06PM March 22, 2010

Capital One had a massive card data theft last week. They are covering it up, but anyone with a card knows that their account is being shut down and new cards are being issued. I guess that it is more important to save face than to prevent fraud, protect customers, and punish criminals.

Adam Gibson of MI 8:53AM August 27, 2009

Use a credit card, Amex for instance who are strong in this category. I too pull out that debit card even when I know better. "It'll never happen to me!" Better to be safe, and read your fine print. Great article, thanks!
John
BDCreditCards

John of GA 5:13PM August 20, 2009

To state that the level of protection offered by debit cards and credit cards is identical, as mandated by law and common practice, obscures the issue of what a consumer is actually entitled to. As I understand it, the laws and implementing regulations on consumer rights regarding debit and credit cards are quite different. In debit, I believe there's a three-tier system. You get best protection if you report the problem within 48 hours. Another level of protection if you report within 60 days. If you don't report the problem by then, you are liable for the whole loss. I think it's true that in practice the issuers and networks try to close the gap in protection. But if you're trying to get your money back, you may appreciate the distinction between what they "give" you and what you're entitled to by law.

Clint Swift of TX 9:52AM August 20, 2009

Banks, debit/credit card issuers and other FIs must consider putting the control into the hands of the individuals, in the form of mobile SMS alerts. Clickatell provides SMS credit/debit card/account transaction notifications to enable anytime, anywhere alerts between financial service providers and their customers, giving power to consumers to scrutinize transactions as they happen; not waiting for the fraud to get out of control.

Kelly Brieger of CA 5:43PM August 19, 2009

I had been using a Momentum debit card and within 2 hours of adding money to this debit card, monies were disappearing due to fraud.
$300 was immediately on hold from some online jewelry company. $85 was spent on Pizza. Had I not called within this 2 hour window, all of my monies would have disappeared.
The debit card company, instructed me to file a police report, which I did. The debit card company required I fax a copy of this police report and complete a claim form, which I did. The $300 was released from the hold over a week later. The $85 for the pizza has still not been credited.
Refunding your money due to fraud immediately? Hardly. The debit card company stated after filing the police report and after faxing a claim form it would take up to 120 days for these monies to be refunded. These were VISA debit transactions.
I am fortunate this only prevented me from purchasing an airplane ticket for my daughter to get back to college. I am also fortunate I am not on a fixed income or one of the many unemployed. This little amount of fraud could have put many on the street having to wait up to 120 days for their refund.
Using a Debit card through your bank account is a much safer transaction and refunds for fraud would be corrected within a few days.

Dawn of CA 4:57PM August 19, 2009