The movie “Gone in Sixty Seconds” showed how a professional car thief could break into, start and drive off in a stolen car in sixty seconds. If you shop online using a debit card, a stranger could steal your identity and empty your checking account in even less time.
Why? The law governing debit card transactions is much, much weaker than the law governing credit card transactions:
- Credit card liability. If you report the theft before the card is used, you have zero liability. If you report it after the card is used, it is capped at $50 per card
- Debit card liability. If you report the theft within two business days, your liability is limited to $50, and some issuers may waive that amount. However, after two business days, your liability jumps to $500. And if you don't report the loss or theft within 60 days of receiving your statement, your liability is unlimited.
Now, both Visa and MasterCard, as a matter of company policy offer some protection. Visa offers zero liability, unless the cardholder was negligent. Mastercard offers zero-liability in the event that the client has not reported two more “unauthorized events” within the past year.
If you choose to use a debit card to shop online, here are some ways to protect yourself.
- Get the seller's phone number in case you have questions or problems.
- Type the seller's name in your search engine to see if there are unfavorable reviews.
- Understand the return policies.
- When entering payment information, make sure the http:// changes to https:// in the site's URL address line.
- Don't shop online unless your computer has antivirus and anti-spyware software, and a firewall.