Our high-tech world is full of buying options. Shopping online is an easy way to find almost anything you want with a few simple clicks. It’s difficult to predict the safest method of payment. While some prefer credit, others like the accountability of pulling funds directly from their bank accounts. I’ll just use my debit card, you say. There are plenty of sites that use secure servers.
Although it’s wise to avoid racking up credit balances, don’t assume online retailers are adept at protecting your information. As Home Depot and Target shoppers learned in 2015, data breaches can occur without warning. To that end, you should avoid using your debit card online for a few reasons:
- A link to your cash. The primary reason to avoid online debit purchases is the direct link to your bank account. A tech-savvy identity thief has the ability to clean out your funds once they have your account number.
- Refunds could be delayed. Even if your debit charges are deemed fraudulent, you won’t receive an immediate refund. Your bank may wait several business days before returning funds to your account, leaving you with few options in the meantime. You run the risk of missing bill payments, overdrawing your account or relying on credit to make ends meet.
- Your loss coverage is questionable. Recouping lost debit funds isn’t a guarantee. According to the Electronic Fund Transfer Act (EFTA), a consumer’s liability for fraud is based on timely reporting. You could owe up to $50 if the theft is reported to lender within two business days, or up to $500 if reported within three to 60 days. After that, the law allows “unlimited liability for unauthorized transfers occurring 60 calendar days after the periodic statement and before notice to the financial institution.” Translation: If your debit account is accessed without your knowledge, you could be stuck with the bill.
What’s the solution?
A debit card isn’t the best form of online payment, but that doesn’t mean virtual shopping is unsafe. Practice caution by:
- Using a credit card. A credit card is a simple solution to avoiding the dangers of online debit. While you may be held responsible for fraudulent debit charges, the Fair Credit Billing Act (FCBA) limits your liability to $50 for fraudulent credit use.
- Ordering online for pick-up. If you’re in a rush, consider ordering items online for in-store payment and pick-up. Major retailers like Target provide this option for shoppers who don’t have time to browse the aisles. Place your order, wait for a pick-up email or text confirmation, and pay for your order in person.
- Shopping in-store. Consider the direct approach of shopping in-store for items you need. The incidence of fraud is drastically less when you have control over who does (and doesn’t) have access to your payment method.
The bottom line: It’s impossible to predict the strategy of an online thief, but you can take steps to protect your finances and credit score. Guard your funds by keeping your debit accounts out of cyberspace.