Sens. Mark Warner (D-Va.) and Mark Kirk (R-Ill.) have proposed the Consumer Debit Card Protection Act, which would increase fraud protections for debit card customers.
The proposal would lower the personal liability cap for debit cards to $50 for unauthorized charges, down from more than $500 and better aligned with federal regulations for credit cards. "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," Warner said.
There have been longstanding concerns about the legal protections available for debit cards. Warner raised a red flag about the lack of protections before a Senate subcommittee hearing in February. Consumer advocates also have spoken up about their worries. A consumer's liability for unauthorized transactions is regulated under different federal laws for credit and debit cards. The proposed law would extend to debit card holders some of the same protections available to credit card customers and shorten to seven days from 10 days the time needed to credit a consumer's account after a disputed transaction.