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Why It Takes So Long To Process Debit Card Fraud Claims And Disputes

Sunday, January 20, 2013 - 10:13 PM
From Consumerist an inside look at how institutions handle debit card fraud claims and why it is important to distinguish between a fraud claim and a payment dispute: 
... [from a] Consumerist reader who works at a bank and handles these sort of claims ...  “One of the largest misconceptions I hear working for claims is that we can just put the money back on people’s say-so,” says W., who is employed by a regional bank with about 60 locations. “If I had my way, I’d refund every person their money as soon as they called us and told us what was wrong." 

... But, explains W., the bank isn’t the one holding your money. When you made that debit card purchase, you transferred your money out of your account and into someone else’s. Your bank can’t always be expected to front you the money that Best Buy, Sears, or some scammer in Idaho still has in their account.            

...There is a big difference between fraud and a payment dispute. And it’s important for consumers to be aware of the difference.   She gives the example of customers who make fraud claims when they find they are auto-renewed for a magazine or some other subscription service.

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pearlbrownpearlbrown1,491 posts since
Nov 2, 2010
Rep Points: 6,486
1. Monday, January 21, 2013 - 4:56 AM
Great article. It also shows why it's better to use credit cards than debit cards for things like trial service or membership:
When you have disputes, it is SO MUCH EASIER to get transactions like these removed from a credit card rather than a debit card,

Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
2. Monday, January 21, 2013 - 7:23 AM
Not only are credit card better bets for such purchases, but for things like trial memberships, online or telephone purchases, etc. you can use secure account numbers. 

Many institutions offer this feature with their credit cards.  The service allows you to establish a temporary credit card number with its own expiration date and security code which links to your real credit card account number.  However, your real card number is kept private and protected, and the vendor never knows it's not your real credit card.

Bank of America, Citibank, and Discover credit cards offer this capability.

Bank of America's "Shop Safe" is IMO the gold standard, and offers the greatest flexibility.  You can set up an account number with a specified spending limit, valid only for a certain number of months, and once the number is used by a vendor, it can never be used by another, which is great security.  IIRC, If you want to make a recurring payment (say electric service) you can specify a monthly limit, but I have never used this.  Once the number is no longer needed, it can be easily deleted online.   

I have only used Citi's service once, and don't recall the experience much, so it must not have been as flexible as BOA's. 

Discover does not allow the limits on the amount and number of months.  Deleting the number requires contacting Customer Service and then they have to transfer you to Technical Support, which is a nuisance.
pearlbrownpearlbrown1,491 posts since
Nov 2, 2010
Rep Points: 6,486
3. Saturday, January 26, 2013 - 1:28 PM
Havent noticed the secure account numbers at Discover of BOA.

I do recall paypal debit card had it long ago.

Dont really use debitcards except for 24 for my 2 reward checking accts. I knock out most of them at gas stations and then use at Aldi when shopping since they dont take any credit cards.


Might use the Discover when they come out with the cashback checking for 10 cents per small transaction.


RJMRJM73 posts since
Jan 21, 2011
Rep Points: 409
4. Saturday, January 26, 2013 - 2:23 PM
For some reason the online account number feature at BOA and Discover is not featured prominently.


Log in to your account. 

Under "Card Benefits", click on "Shop Smart". 

Under the "Shop Smart" heading, look for the "Shop with security and convenience" text and you will see a link to "Create secure account number".


Bank of America: 

Log into BOA and click on whichever credit card account you wish to choose. 

Somewhere on the right-hand side of the page towards the bottom you will see a reference to "Shop Safe" with verbiage about keeping your card number private and protected. 

Click on the link to "Shop Safe" (you will have to enter the CVC (3-digit code) on the back of the credit card to authenticate your request), or use an adjacent link to learn more.


Hope that helps. 
pearlbrownpearlbrown1,491 posts since
Nov 2, 2010
Rep Points: 6,486