Debit and ATM Cards can be dangerous to your financial health

Did you know the laws limiting your loss if your Debit or ATM Card is stolen is different than if your Credit Card is stolen? Did you know the limits are different if the number is stolen versus the physical card being stolen?

Credit Card liability is governed under the Fair Credit Billing Act (FCBA). Debit and ATM Card liability is governed under the Electronic Funds Transfer Act (EFTA).

For Credit, Debit and ATM Cards:

If you report the loss before your cards are used, the FCBA and EFTA say the card issuer cannot hold you responsible for any unauthorized charges.

For Credit Cards:

If your credit cards are used fraudulently before you report them missing, the most you will owe for unauthorized charges is $50 per card.

For Debit and ATM Cards:

Again if you report an ATM or debit card missing before it’s used without your permission, the EFTA says the 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 fast you report the loss.

0 to 2 days

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.

2+ to 60 days

You could lose up to $500 because of an unauthorized transfer (how friendly is your bank?).

60+ Days

Your loss could be unlimited 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.

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. You may be liable for $50.

Bottom Line

Your potential liability is greater for Debit and ATM Cards than for Credit Cards. I wonder if this is why consumers are being encouraged to use debit cards. In either case you should review your statement the day you receive it. If your card issuer or bank has an email or text notification service available – use it. Set the amount as low as they permit. It sure would be nice to receive a text telling you within minutes that some thief is racking up charges to your account.

Report unauthorized charges as soon as possible! Remember once you have reported the unauthorized use, you cannot be held liable for additional unauthorized charges that occur after the notification. Most companies have toll-free numbers and 24-hour service. It’s a good idea to follow up your phone calls with a letter. Send the letter to the address provided for billing errors; Not with a payment or to the address where you send your payments. I encourage you to use Certified Mail with return receipt requested.

For more information you can visit

About Bruce Demarest

Bruce Demarest is a Identity Theft Protection Specialist. He has designed and taught classes to educate individuals and businesses in identity theft risk management. The individuals have learned how to continuously monitor their financial identities from credit fraud, plus how to monitor their personal identifying information for unauthorized use. His business clients have become compliant with the federal & state privacy laws. He has conducted information security audits to identify their potential problems and has designed security policies, programs, and practices to address those problem areas.
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