PIN's and credit cards.

[Michael Froomkin - U.Miami School of Law]

I'm sure the posters all know (but not all non-US readers may) that US law
requires credit card issuers to reimburse customers for fraudulent credit
card charges above $50 so long as the customer notifies the bank promptly
upon learning of the loss.

In practice, most banks refund the $50 too.

The $50 rule does not, however, apply to debit cards, and there has been a
massive promotion of debit cards by banks in the last three years
resulting in a much higher take-up than ever before. This appears to be
driven more by the different transaction fees and the zero float than by a
desire to get around the reimbursement regulation.  As Visa and Mastercard
are pushing branded debit cards that work where the credit cards do (but
cost merchants more than non-branded ones), they have as yet not been
anxious to be Draconian about enforcing their rights; perhaps this will
change once they achieve market dominance.

On Sat, 16 Nov 2002, Peter Tomlinson wrote:

> Roland Perry <roland@linx.net> wrote:
> > .... Even today, USA
> > merchants *never* check signatures (at least in places I've been), which
> > means that a credit card is virtually a "blank cheque producing
> > machine".
> 
> But almost all USA credit card transactions are online, which creates an
> entirely different trust model from the one in use in the UK.
> 
> Peter
> 
> 
> 
> 
> 

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