[DannyBoy]

I happen to work for a financial institution and I have heard it through the grape vine that there is a new policy coming for all Visa Check Card holders (what is hooked to a checking/savings account). I found out in an email that this is being sent out to our Visa Check Card customers:

"Non-Visa PINless Debit Transactions on Visa Branded Cards. Effective April 1st, 2009, new procedures will go into effect that may impact you when you use your Visa Check Card at certain merchant locations.

Before that date, your Visa Check Card transactions that are made without supplying your signature or your PIN will be processed as Visa Check Card Transactions. Beginning on April 1, 2009, if you do not enter a PIN or sign the transaction receipt, your transaction may be processed as either a Visa Check Card transaction or a transaction on another network, such as PULSE or NetWorks.

Please be advised that, should your merchant use PULSE or another network, and not the Visa network, when processing your Visa Check Card transactions without a PIN or your signature, certain Visa policies that protect you from any liability for unauthorized transactions (subject to the limitations set forth in you Cardholder Agreement) will not apply to those transactions. Please refer to your Cardholder Agreement for further details."

I just got this email about 15 minutes ago and I've been asking around to make sure if this is correct and all I can get is a "we guess so". The person who sent it out didn't have any more information than what was being sent out to customers. But basically, it seems like Visa is trying to get themselves off the hook for fraud issues.

So, if you do business with a merchant that doesn't use Visa's network and they don't make you sign for the item (including pay-at-the-pump and internet transactions) you will not be covered for fraud on the card.

Here's the catch: If someone gets your card and uses it at one of these non-Visa network or internet places, you don't have fraud coverage through Visa. Further, let's say you did authorize a transaction; for example $20 for gas. If the merchant isn't on the Visa network and they accidentally charge you $25, you aren't covered by Visa.

I'll try and post more information on this as it becomes available, but right now all I have is what the letter says.

~D.B.

 

[Gene01]

Hmmmm…..The issuing institution for my Visa debit card suggests that I have each transaction processed as a credit card instead of debit. Of course, that automatically means I have to sign the receipt.

 

[oldskoolmodder]

If a merchant is charging me $25 for a $20 bill, then most likely it isn't an error, but deliberate. Nothing surprises me anymore. Rarely if ever does anyone check my ID when I purchase something in person, and this worries me very much. I even have it written on the back of my card, to check I.D.

 

[pitchnsplinters]

Thanks for the post. Keep us up to date with what you learn.

 

[North40]

I'm pretty sure federal law says that you aren't responsible for fraudulent charges, regardless of which financial system processes them.

 

[LocalMac]

Doesn't sound like a very ethical change by visa, but I guess that big business for you. I was just notified by my bank that I should get a new Visa card because of some security issue. A couple days later my fiance also got notified that she should change hers. Don't know if that's related to this situation.

 

[DannyBoy]

The problem that I see with this isn't how I use the card, it's how the person who steals my card/card number uses the card. The way the notice reads, if they use it in a manner outside of that network, then I don't have any protection.

I'd consider carrying cash instead if it wasn't for the fact that I get the third degree from clerks on that now. Apparently, in order to use cash at Lowes you need to give your zip code now. WTF?

 

[North40]

Barry - I see your point, but I think we're talking about two different things here …

Take the example above - I make a legitimate charge for $20, but the company charges me $25. I'm not responsible for that, no matter who processes the charge. Yes, Visa's process gets the money back to me more quickly, but that $5 probably isn't going to cause all the mayhem you mention.

On the other hand, if my card is stolen, even if I have been choosing to only use Visa's processing system for my charges, that doesn't mean the theif will be thoughtful enough to do the same. Same with your ATM-only card (if it's Visa branded). Just because you only use it at an ATM, that doesn't mean that if it is stolen the the theif will make the same decision.

So while Visa's change is unfortunate, deciding where I make purchases based on what processing system the vendor uses does little to protect me.

 

[MedicKen]

CASH!! I have cut up all my cards a long time ago and I onlly have an ATM card, you know the kind without the VISA or M/C logo. If I want to order something, internet, mail order, I send a money order. That eliminates all the headaches and keeps the money in MY pockets.

 

[North40]

Barry - Yeah, what you said!

I'm not arguing with you - my comments are partially a response to you and others, and partially additional input on the subject.

Here's why I thought you might be advocating a "where to purchase" concept: I said you were protected against fradulent charges regardless of where they were made, and you responded directly to my comment (by quoting it) with the comment, "Do you really want checks bouncing, late payment and overdraft fees, or worse yet… auto overdraft transfer cleaning out your savings, too?" which I took to imply that you believed these things became more or less likely depending on where you charged. Re-reading your post, I see that you were leading up to another point (that "real" Visa cards are the source of protection), rather than advocating that people purchase only at vendors that use Visa's network.

Statistically, even among people who pay off their credit card balance every month, we tend to spend more with credit cards than we would if we were paying cash - basically wasting money because we're paying with plastic. And unfortunately, only about 1% of people can handle credit cards as responsibly as you do (paying off every month). The average cardholder carries a $3000 balance from month-to-month (I think that is average per card… how many people have eight or 10 cards!?), paying outrageous amounts of money in interest over time, and often getting themselves into trouble when they have a month when money is tight. So while the "real" credit card does offer you some protection that a "piece of trash fake" doesn't, the "real" card is like playing with fire for most people - sooner or later (usually sooner) it gets them in trouble.

 

[DannyBoy]

Update:

I got some clarity on this and it is what it is. If you (or someone who is unauthorized) makes a transaction on a non-Visa network, then you have no fraud protection. I'll say it again: Crap. Total crap.

~D.B.

 

[Gene01]

Well now, Danny. It sounds like even credit card transactions are included. You are right….It's total crap!!

 

[33706]

Not to hi-jack this thread, but…
I have just been dinged for TWO overdue fees on my Capital One card…which has a zero balance. I moved to Canada, and Capital One refuses to switch my address. So, my mother forwards my statements to me. I wish to keep my 9.9% rate, but to get my current address I have to apply for a new account… and a 21% interest rate. After raising the roof with a phone rep, he waived the fees, which were imposed on me for not paying a "Annual Membership Fee" which I never had before. The statements would arrive, and I'd not even bother to open them. So a past due payment of $58 along with this bogus $19 Annual Fee was due.
THEN…the rep confided to me: By the end of March, ALL Capital One cardholders worldwide would be advised by mail that their new percentage rate would be 29% interest rate or higher!! What's in YOUR wallet????