Instead, the Electronic Funds Transfer Act (EFTA) outlines debit card fraud protection. The FCBA doesn’t extend protections to debit cards. Most credit card networks advertise ‘zero-liability’ protection to attract consumers to their platform, even when a cardholder fails to recognize the fraud until they receive their statement.ĭebit cards are different. If a credit card is reported lost or stolen, the cardholder isn’t on the hook for any additional charges made by the fraudster. This law ensures that users aren’t held liable for more than $50, regardless of the fraudulent amount. Learn about different types of payment disputes Who is Liable in a Debit Card Dispute?Ĭardholders are protected by the Fair Credit Billing Act (FCBA) in criminal credit card fraud cases. All are more advantageous to cardholders with credit card disputes. For example, the debit card dispute time limits, cardholder liability limits, amount of funds available at purchase, and the liability afforded to each party. If the bank decides the cardholder’s claim doesn’t hold water, the cardholder never gets the money back. In these instances, the funds in question won’t be returned to the cardholder until the bank can resolve the dispute. Otherwise, they must work with the merchant to refund any transactions they are unhappy with.Īlso, the bank might be more hesitant to issue a provisional credit, as the money belongs to the cardholder, not the bank. Thus, cardholders have more to lose when it comes to debit card disputes.Ĭardholders are only entitled to dispute debit card charges if they’re the victim of fraud or abuse. They’re tied to funds that actually exist in the cardholder’s name, rather than a line of credit. On the other hand, debit cards are linked to the cardholder’s bank account. If the merchant can refute the dispute, the funds will be re-charged to the cardholder’s credit line. If the customer is proven correct, they will keep the funds. The bank then investigates the matter to determine the case’s validity. If a customer disputes a charge, the issuer will immediately extend them a credit to cover their losses in most cases. That isn’t to say that they are exactly the same, however.Ĭredit cards are attached to a line of credit extended to the cardholder by their bank. Cardholders can use them almost interchangeably, and debit cards are usually accepted anywhere you can use a credit card. What's the Difference Between Credit and Debit Disputes?Ĭredit and debit cards aren’t all that different. Let’s dig into these differences a bit in the next section. However, from the cardholder’s point of view, debit card disputes can cause much more trouble than a credit card dispute. Both mean losing revenue and merchandise, and paying added fees. This is commonly referred to as a “chargeback.” Learn more about chargebacksįrom the merchant's perspective, debit card disputes are very similar to credit card disputes. If the merchant does not respond to a cardholder’s attempts to seek a refund for an item they have purchased, that cardholder may bypass the merchant and call their bank instead. The cardholder does this, in theory, because there is some problem with the transaction which they are unable to resolve by working with the merchant directly. A debit card dispute occurs when a cardholder contacts their issuing bank and disputes the validity of a debit card charge.
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