Sens. Mark Warner (D-Va.) and Mark Kirk (R-Ill.) introduced legislation last week that would expand current federal law and cap liability for consumers affected by debit card fraud at $50.
Under current federal law, consumers can be liable for up to $500 or more if their debit cards are stolen or used fraudulently.
“Debit card use has just exploded in recent years, especially among young people, and consumer protections must keep pace,” Warner said. “Debit cards are used in much the same way as credit cards, so it makes no sense for credit card fraud liability to be capped at $50 while debit cardholders can find themselves on the hook for $500 or more.”
According to Federal Reserve data, the number of debit card transactions was nearly double the transactions made with credit cards in 2012, and industry experts estimate that American consumers made nearly $2 trillion worth of debit card transactions in 2012.
“In light of the millions of consumers who have had their financial information stolen during one of the recent data breaches, Sen. Warner and I will continue to take data security and the importance of consumer protections very seriously,” Kirk said. “This legislation ensures that our federal statutes for debit card protections are on par with those of credit cards, and will help consumers keep their wallets safe.”
The legislation would afford debit card holders the same protections available to credit card holders under the Truth in Lending Act and would also shorten the amount of time available to re-credit a consumer’s account following a disputed transaction from 10 business days to seven business days.