MasterCard Extends Zero Liability to ATM and PIN

Advertiser Disclosure

Having zero liability may not sound important, but you might be singing a different tune if you suddenly discover that you have become the victim of fraud or if your credit card account becomes compromised in some way. When you have zero liability, you will not be held responsible for transaction that you do not authorize.

Fortunately, MasterCard has recently announced a huge development in their zero liability protection policy. Not only will you be fully protected from any fraudulent purchases, you will now have those protections extended to all ATM transactions as well and any PIN transactions. This is huge news, and it will be a reality as of October 2014.

If you thought that having zero liability protection already included ATM or PIN transactions, well, you were not right. But, fortunately, even those who just (incorrectly) assumed they were covered for all transaction types will now actually have those coverages.

Issues About Zero Liability

There are plenty of ways that you could fall victim to fraud, and not all of them involve actually having your wallet stolen. Every day, you hear news report about databases and servers being hacked, and this is a popular way for thieves or criminals to gain access to your personal information—including credit card numbers, and plenty of other personal data that can give them the ability to use your money as they wish. Until now, the zero liability only included those transactions that required a signature—so, if a thief forges your signature, you would be reimbursed for the transaction amount.

When it comes to debit cards, the protections are somewhat different. Credit cards and debit cards operate differently, and often have different protections. The Electronic Funds Transfer Act is the legislation that protects debit transactions. As long as you discover your debit card missing and report it as lost or stolen before any transactions are made, you will not be penalized. Depending on when you notify the card issuer, you may be held liable for partial amounts of the transactions. If you are not paying attention to where your cards are, you could end up being held responsible for large sums of money, should a thief become able to access your account.

Closing Loopholes

Until now, neither Visa nor MasterCard offered coverage when it came to fraudulent transactions that took place using a PIN number, only covering transactions that occurred using a signature. This new policy is unique, because transactions that are processed as “credit” go through entirely different networks than those processed as “debit,” when you are given a choice between the two at a cash register.

Until the new policy goes into effect, MasterCard will not provide zero liability coverage for any PIN transactions that occur. Visa is not yet offering any promise of zero liability for PIN purchases in the future, but, it is likely that they will eventually follow suit and provide similar coverages to MasterCard.

What it All Means

For most consumers, not much will really change. Most fraudulent credit card transactions occur with signatures, not PIN numbers, and most PIN numbers are not part of the data that can be hacked by most thieves. It is still comforting to know, that, should you be careless enough to write your PIN on your card or something crazy like that (because you haven’t been warned enough?), that you will be protected if the card is lost or stolen.

Keep track of your finances and your credit and debit cards! If they should ever turn up missing, be sure to report it right away. And, by the way, NEVER write your PIN number on the card, that’s just asking for trouble.


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