[telecom] Target: Hack may have hit 40 million accounts

Sorry, Bill, this is one fact Bruce has wrong as do most newspapers' reporters whom I have to constantly correct here in Silicon Valley (San Francisco Chronicle, San Jose Mercury News, Los Altos Town Crier, Mountain View Voice, Palo Alto Online, and more).

There have been new Federal laws regarding debit cards for for quite some time now:

which cites the Fair Credit Billing Act (FCBA):

and the Electronic Fund Transfer Act (EFTA):

Plus, my bank, Bank of America, has "Zero Liability Protection" as you can see:

For all intents and purposes, debit cards are as "safe" as credit cards and perhaps more so due to also having to enter a PIN code whereas a credit card can be stolen and used by anyone.

Thad

Not really. For one thing, most people use debit cards as swipe and signature, just like credit cards. Banks prefer this because the fee is higher than for PIN entry mode. Some prepaid cards don't even have a PIN.

For another, you have to report debit card fraud within two days for the $50 fraud limit to apply, while for credit cards it's considerably longer, at least until you get the statement. Some banks say they will waive some of your liability, but anyone who believes what Bank of America says deserves what they (don't) get.

Most important, with a credit card, the money for the charge you are disputing is in YOUR account, while with a debit card it is in THEIR account. You still get the best protection by using a no-fee credit card and paying your balance in full every month (less, of course, any disputed charges.)

R's, John

PS: Chip+PIN cards are different, but they are still used approximately nowhere in the United States.

So, I go to Target about 3 times a year. I shopped there 12/4. What a PITA. My card can ONLY be used as a debit card and I'll be getting a new one sometime in the next 10 days.

I got generally caught in the TJX breach and now I get hosed in the Target deal.

Carl

Which is pretty clear that you have potentially unlimited liablity if someone steals your debit card information, and you don't report it promptly. There's no such onus on credit card fruad reporting.

Not at all true. Even if your bank makes good your losses, you're out the money while they investigate, which means you can't use it for other purposes, which may mean you can't pay your bills. (And in my experience, that can take a week even when there was no dispute about what was fraud.) With a credit card, you only potentially have part of your credit limit tied up, not your actual money. That's a substantial difference.

Banks typically also have less sophisticated fraud detection systems on debit accounts, because it's your money at risk, not theirs. So transactions that would throw red flags for credit cards don't with debit cards.

True.

But when the card is used as a PIN debit card, some merchants will give you cash back and no fee. That is, if your purchase is $75, you ask for $25 in cash back, and they'll charge your card $100 for the transaction, with the $25 listed as change. This is a nice convenience.

Sadly, very true.

True. One way to protect yourself with debit cards is to limit the maximum usage amount to a fairly low value. This way, if the card is stolen the thief can't do too much damage. But I agree with the above, it's better to use a no-fee credit card for the reasons stated.