Debit Card Education
As you can tell by flipping through a few issues ofThe Green Sheet, the debate over debit cards and their liability is far from over. While companies such as MasterCard and Visa have capped the cardholder liability, the issue of legislation continues to be sidestepped.
The most recent development has been to put the responsibility on the cardholders. The Electronic Funds Transfer Association (EFTA), whose members include Key and Huntington Banks, Mobil Oil, and the STAR ATM system, is a trade association serving the electronic payments and commerce industry. They recently asked debit card issuers to place greater emphasis on educating cardholders.
H. Kurt Helwig, executive director of EFTA said, "Off-line debit cards function like checks, but are much more convenient ... Nevertheless, consumers should be taught to treat them with the same care they give to a check or pass book."
Helwig disagreed with congressional efforts to regulate debit cards in response to allegations that the cards lack sufficient security. Helwig said the Visa and MasterCard caps prove that the industry is regulating itself. "In light of these positive steps, I do not think government intervention is warranted," he explained.
Federal Reserve Board Governor Laurence Meyer agreed and told the committee, "What is required is proper education on using and securing the cards, not government intervention that would stifle the market's desire for this payment mechanism and limit development of new payment systems in the future.
