The fact that the funds are not protected in case of debit card fraud or theft is not known to many people.

When you use the credit card next time, remember the statistics. It show that about 25% of the data break in US occur in the credit and debit card section.

This percentage has been provided by Identity Theft Resource Center.

In most cases liability to the unauthorized credit card are limited to $50 according to the Fair credit billing Act. The Electronic Fund Transfer Act also gives this limited liability to credit and debit card users.

Nessa Feddis the vice president and senior counsel for the trade group American Bankers Association, clearly describes in her statement:

As a general matter, you’re not liable for unauthorized transactions. But if you lose the card, you may be liable if you don’t report that someone’s been using your account.

The Electronic Fund Transfer Act defines that liability rules clearly. If a person reports a missing credit or debit card before its use, he will not be liable at all. If a person reports a card fraud within two business days, he will be liable for $50 for unauthorized charges.

But in the case of not reporting within two business days, you can be liable for $500 or more. If a person doesn’t report within 60 business days of receiving a back statement with charges, he will be liable for the whole amount.

Banks really cannot penalize a person for being careless but there are a number of unauthorized charges which bank can cash on you under the Electronic Fund Transfer Act. Like in the case if charges are given by family or friends the situation can become quite complicated.

Lisa Westermann, a spokeswoman for Wells Fargo tells that:

Merely knowing the suspected perpetrator would not result in the cardholder being liable for fraudulent transactions,


if the customer gave his or her PIN to the fraudster, we may decline the fraud claim.

For example if you give your PIN to your relative for a transaction and he takes another transaction without your authority, in this case you will be held responsible for both transactions. Amanda Landers, a spokeswoman for Capital One Bank details by saying:

The customer will be held liable if the customer gave permission to the individual who made the transactions and did not revoke that authorization with the bank.