Zero liability on US/UK debit card fraud is just a promise

US identity fraud was reported by the US Javelin Strategies and Research down 28 per cent in 2010 but the consumer cost of those incidents rose steeply from $387 to $631 in the same period. A decrease in data breaches and increased security measures also reported by the US Javelin Strategies and Research have all helped push identity fraud down, but here is the bad news – the types of fraud being committed and this includes debit card fraud are more expensive. 🙁

I’ve been saying for years that the banks (both in the US and the UK) will start charging by default for Identity Fraud Transaction Insurance (IFTI) on bank accounts /debit cards. I would ascertain that a bill would have to be passed in the US and in the UK to allow for banking regulation / legislation to incorporate this protection. Without it, banks would have to sell the IFTI to customers and it’s unlikely many would be prepared to take up the offer.

Bank insurance premiums are on the increase and given the economic collapse of 2009/10, I would be surprised if the banks don’t have this type of transaction insurance on their future road map. If you live in the US and you report a stolen card within two business days, your liability is capped at $50. After two business days, the cap is moved upwards to $500. If you wait more than 60 days after your bank statement, your loss could be unlimited 🙁 Yikes!

Most of us have two accounts, one for spending and the other for paying the bills. Imagaine your bills account has been emptied by fraudulent means towards month end – how do you envisage paying the bills for the following month? Remember some banks will not credit funds from a fraud for up to 10 business days. So the banks do have a duty of care, but you should know that they can only “promise” zero liability on bank account and debit card fraud. It’s not written down in stone that they will refund any bank account or debit card fraud loss though!

Safe surfing folks!

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