As a result of the changing times, refraining from online banking activity is growing increasingly difficult — many physical retailers are being phased out by competitors like Amazon.com, and banks are pumping money into mobile banking endeavors in order to stay ahead of the curve of their competitors. Luckily, cardholders are now equipped with a variety of credit card security features that make online shopping (and shopping in general) a safe experience. From dealing with hackers, identity theft, or shady merchants, here are seven forms of consumer protection credit card issuers offer to alleviate your very valid worries.
1. Get justice with a chargeback
Consumers who experience online purchase difficulties, such as being scammed, can file a complaint regarding one or multiple purchases on their statement in order to have an investigation initiated. A chargeback is a forcible demand by a credit card issuer for a merchant or retailer to settle a debt and make good on a fraudulent loss or disputed transaction.
The threat of a chargeback and the possibility of a forced reversal of funds is incentive for merchants to provide customers with quality customer service and timely refunds when valid. This form of credit card consumer protection is specified in Regulation Z of the “Truth in Lending Act,” with debit card users being protected under Regulation E of the Electronic Fund Transfer Act. In the U.S., these reversal rights allow consumers to have funds returned to their bank account, line of credit, or credit card.
2. Don’t be held liable
In the U.S., liability limitations for fraudulent charges made in the case of credit card loss or theft are excellent. Under The Fair Credit Billing Act, your liability for unauthorized charges made on your card is limited to $50, but if you report the loss before charges appear, you are not responsible for any of them. Also, if you have your credit card, but the credit card number is stolen, you are also not held liable for unauthorized use.
As soon as you report your ATM or debit card missing, you cannot be held liable for unauthorized debit card charges, according to the Electronic Funds Transfer Act. However, the longer it takes you to report the loss, the more liable you will be in paying for the unauthorized debit charges made.
- If you report the loss before any unauthorized charges are made, you are responsible for $0.
- If you report the loss within two business days, your maximum loss is $50.
- If you report the loss more than two business but before 60 calendar days after your statement is sent to you, your maximum loss is $500.
- If you report the loss more than 60 calendar days after your statement is sent to you, all the money in your ATM/debit card account will not be reimbursed to you, and possibly more if you have additional accounts linked to your debit card.
3. Guarantee security against unauthorized access
Some, but not all banks guarantee the money in your account if someone hacks in. One example is Charles Schwab’s promise on their website to customers: “We want you to have the highest level of confidence when you do business with Schwab. So we offer you this simple guarantee: Schwab will cover 100% of any losses in any of your Schwab accounts due to unauthorized activity.”
Other banks that deliver this promise are HSBC, Ally, SunTrust, and First Tennessee Bank.
4. Shop with a single-use card number
Certain banks offer one-time use virtual account numbers cardholders can use to shop online, which means never having to supply their actual credit card number. Though this service comes at a price, customers may be able to take advantage of free trials if they call customer service. Banks that offer this service are Citibank and Bank of America®, and major credit card issuer MasterCard also offers it.
5. Do you use MasterCard?
MasterCard recently announced its new “Identity Theft Resolution” assistance program, which launches in July 2014. It is creating a buzz in the banking industry for its pioneering endeavors in heightening credit card holders’ protection and security against theft:
- Extends its zero liability policy to extend to cover all MasterCard pin-based and ATM transactions (debit cards).
- Provides assistance in canceling missing cards.
- Alerts credit reporting agencies when a card is reported missing.
- Targets searches in order to detect whether a cardholder’s stolen personal and confidential data appears online.
6. Block and unblock your misplaced debit card
Many banks have a protocol in place for customers that report a missing debit card that allows them to deactivate and reactivate their missing card. This security feature is helpful for cardholders who may have simply misplaced their card for a period of time. They can reactivate the card later, rather than ordering a new one. This feature is also inherently helpful in blocking thieves from accessing their checking account.
7. Plaster your face on a photo credit card
This one isn’t an online feature, but, a thief would have a hard time using a credit card with a photo on it. Photo credit cards are exactly what they sound like — credit cards with a photo of you on the front. For the extra cautious, picking a bank that offers this feature might not be a bad idea. Bank of America®, Capital One, Citibank, and Wells Fargo offer this delightful feature.
As technology evolves, credit card issuers and financial institutions are tightening the credit card security features available to ensure cardholders are protected from the multitude of scams, theft, and hacks that can be a nightmare for consumers.
Many banks have round-the-clock customer service and websites in which you can get in touch with a representative who can help you take care of any and every catastrophe that comes your way. Remember you can review your bank or credit card on MyBankTracker and share your experience with fellow cardholders and consumers.