Sunday, February 16, 2014

Will chip-technology in debit cards really solve the problem?

The media have reported that "chip" technology credit and debit cards will replace today's magnetic stripe technology by late 2015.

But that will not really make a lot of difference unless people have to enter pins -- and probably strong ones, like strong passwords, for every transaction.  

People may have trouble remembering long passwords at ATM's.  They might be able to sync them with smartphones, but these can be stolen, even at gunpoint.

Is this a solution?  

Thursday, February 06, 2014

Electronic Funds Transfer Act can make consumers responsible for their own losses due to lax security of debit cards, if much time passes at all

There's a little more definitive information on the legal rights of credit card holders v. debit card, in case of fraud, in this Washington Post article by Danielle Douglas, "Why you should leave your debit card at home", here.

The governing legislation is the Electronic Funds Transfer Act, and consumers have very little time to detect pilferage, even from other accounts at the same institution that might have some linkage to the debit card indirectly.

The FDIC has a discussion of the EFTA, here

Monday, February 03, 2014

Western Union is still around (for debt collection)

When I went into a SunTrust branch Saturday morning, I saw some freebie cards advertising Western Union payment services near the counter.  I thought this was odd to see in a bank/
 
When I worked as a debt collector in 2003, we were told to create urgency and to pressure debtors to use Western Union to make payments immediately.  If the debtors had credit cards or loans, they shouldn't have been unbanked.  It seemed as though it would be totally unnecessary.

Recently, there have been proposals to let the USPS offer banking and very small loans to low income people.
 
It seems our system is designed to keep some people vulnerable.