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Comment by seabre | Hacker News Reader

As someone who has been hit with fraud on a debit card and a credit card, the process to recover money from fraud on a credit card is so much easier and more hassle-free than a debit card.

The big difference is that with a debit card, it's your money that is hit by fraud. The debit card is basically just a proxy. You have to go file a police report. You have to hope the bank will give you the money back.

When the credit card gets hit, it's the credit card company's money and they will seemingly chase the fraud to the ends of the earth to recover it.

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> The big difference is that with a debit card, it's your money that is hit by fraud.

I kind of disagree. I think what's happened is the bank would prefer you to believe that. Imagine I kept my money at the bank, and deposited $10000 with the teller. Immediately afterward a robber follows in and steals that $10000 from the teller. Does the bank say "oh no Mr. TheChao! A robber stole your $10000!". I mean, no? The bank got robbed. Just because the bank's digital security is more tied one-to-one to dollars and its easier for a robber to steal from "my till" doesn't mean it was me who was robbed. It's the bank's job to stop that.

Eh when you deposit money with a teller, it gets added to your account, which is in physical terms probably just a big storage and a database who has how much.

But in the case of debit card, the card ties the money to your account. It is actually that.

It's as if someone would steal from a personal safe at the bank.

Except that you have strong statutory rights and commercial agreements between your bank and the card networks making it very likely that you’ll be made whole.

> likely

> will

Which is why the credit card is still the better option. Especially given that the max liability on a credit card is always $50 if caught within the first 60 days, while the max liability on a debit card is $50 only if caught within the first two days, then up to $500 if reported after up to 60 days.

They may post a provisional credit when I report the fraud on the debit card or they can wait up to 10 days to do so. With a credit card, no money has left my account and I get the final say on whether I want to part ways with my real money. If the bank really wants to fuck me over by saying it's not fraud, I get to make it as unprofitable as possible for them, which includes forcing them to sue me if they really want the money.

I will take the ding to my credit report and a lawsuit over actual money taken directly out of my account any day.

> while the max liability on a debit card is $50 only if caught within the first two days

Within two days of learning of the fraudulent use or the loss of an "access device" (i.e. a card). Otherwise you have 60 days from the statement date as well.

> I will take the ding to my credit report and a lawsuit over actual money taken directly out of my account any day.

That's definitely true for many people, but probably not for many others, e.g. anyone wanting to buy a house or even rent an apartment.

If the money is taken out of your checking account and you can't pay a bill or rent, you are in the same exact situation of having your credit/rental history ruined. The time horizon for that happening is just sooner. The credit card still wins.

Eventually you'll probably be made whole (unless the bank isn't one of the ones that waives your $50/$500 liability). But usually they won't return your money until after they resolve the dispute so your account is still missing the disputed money which could make you bounce checks or be unable to use your debit card until the dispute is resolved.

This was also the subject of a brief sketch on That Mitchell and Webb Look:

> Bank official: Sit down Mr. Coleman, I'm, I'm afraid I've got bad news about your account.

> Mr. Coleman: Really?

> Bank official: I'm very sorry to say that someone's stolen your identity.

> Mr. Coleman: Oh God! Do you know who it was?

> Bank official: Well -- they said they were you, but uh--

> Mr. Coleman: Of course. So, um, what happened?

> Bank official: Well it was on the bank website, someone logged in, and committed identity theft electronically.

> Mr. Coleman: I see. Did they take anything else?

> Bank official: Uh, no.

> Mr. Coleman: Oh good, so all the money's still there...

> Bank official: What?

> Mr. Coleman: Well: it's just my identity that's gone -- none of your money?

> Bank official: Well no, they did -- they, they, emptied your account. It's identity theft, they took all the money.

> Mr. Coleman: That sounds more like a bank robbery.

[continued] -- see https://www.youtube.com/watch?v=CS9ptA3Ya9E for the full skit.

Just as a handy thing to chuckle over and then link others to, if the topic comes up again.

But that's not what happened when someone steals your debit card number. Once the teller enters the deposit and you walk away from the window, the money in your account is yours, the cash the robbers stole is the banks.

When someone steals your debit card number and uses it, it's your money that is debited from your account, not the banks, and debit card transactions have much different rules than credit card transactions where you're generally not held responsible at all for fraudulent transactions)

But with debit card transactions, you can be responsible for up to $50 of fraudulent transactions reported within 2 days, and $500 for those reported within 60 days. And the bank is not required to return the money while they investigate the fraud.

Though many banks waive those liabilities and treat debit card disputes the same as credit card disputes (but still may not return your money while they investigate, so you could be bouncing checks when someone makes a $1000 fraudulent transaction if you can't float the $1000 yourself while they investigate)

I refused to allow the bank to issue me a debit/ATM card against my primary checking account, fortunately they are one of the few banks that still offer a dedicated ATM card so even if I lose the card, it's useless without the PIN.

This depends heavily on the country you’re in. In the UK banks are required to refund you within a single business day if they don’t have any evidence that the customer isn’t trying to defraud the bank themselves.

They try to squirm out of that of course. But in general getting your money back isn’t too tricky even with a debit card.

Oh yeah. I should definitely caveat: I am in the US. I think banks here are required to cap your loss to $50 USD if you report unauthorized fraud within two business days. But still, the onus is on you. Meanwhile, virtually all credit cards in the US offer $0 liability protection. Which means at most you pay nothing.

2 business days is a lot more strict than credit cards, which at the very least would not blink an eye at 2 weeks.

Er what?

You don’t even pay for the fraudulent credit card transactions in the first place! There’s no money for them to return!

This is where you find out which banks suck, and which do not. I will say that while USAA is a long ways from perfect, when someone swiped my wife's debit card and took $5000 from our checking account, they put that money back within a day while the investigation was pending. No police report necessary, either.

I don’t thing Regulation E allows banks to require a police report before processing an unauthorized payment, nor can they outright refuse to do so.

Practically, Reg E is essentially as strong as Reg Z.

> Practically, Reg E is essentially as strong as Reg Z.

Not even practically, but that's beside the point. The point is that with regulation E, I am potentially put in a position where I have to work to get my money back; I have to file a lawsuit against the bank if I think their determination is wrong (and that's assuming there isn't an arbitration provision, but many people don't realize they agreed to binding arbitration).

With regulation Z, the bank has to work to get their money back. They have to file the lawsuit against me if they really want the money. And it's $0 liability under many circumstances mandated through the regulation, not just a revocable promise from the bank.

> With regulation Z, the bank has to work to get their money back.

Yes, but you potentially have to work to get your credit back.

> And it's $0 liability under many circumstances mandated through the regulation, not just a revocable promise from the bank.

Debit card liability is also largely mandated to be $0 under card scheme rules.

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