What are the laws protecting a consumer who uses a debit card to pay for a transaction which turns out to be a scam?
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What are the laws protecting a consumer who uses a debit card to pay for a transaction which turns out to be a scam?
A company called saw my friend’s ad he placed on craigslist to sell a motorcycle. They then called him and convinced him it would be a good idea to pay them $399 to “help” him advertise his bike. The company supposedly places ads on places that are free to place ads. As far as we are aware ads were not placed. He called the company multiple times, no calls back. Look on-line to see the extent of complaints for this company. He finally disputed the charge with his bank who would not reverse the debit. Credit cards seem to have laws covering this type of thing. What about debit?
Asked on August 23, 2011 Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Unfortunately, a debit card does not offer ANY protection against scams. Even though it's a "card," don't think "credit card"--think check or ATM withdrawal. When you use a debit card, rather than the money be loaned on your behalf by the credit card company, the money is drawn directly from your bank account. So just like if your friend took $399 out of an ATM and handed it to this other company, your friend has no way to get the money back if they take it without providing what they agreed to--or rather no way to get it back other than suing the company and winning. And, of course, if the company is not local, then suing them can be very difficult, and the cost of suing them could easily exceed what your friend could recover even if he won, unfortunately.
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