Thoughts on Wells Fargo Debit card "zero liability Protection"

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eye.surgeon
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Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by eye.surgeon »

I understand that as a general rule debit cards are less protected than credit cards when it comes to unauthorized transactions. I have 2 college kids who both work and have some income and use their Wells Fargo debit cards daily for small purchases. I do like the ethos that debit cards teach ie. spending only what you have immediately available. Wells Fargo has what they call a zero liability protection policy which essentially extends legally required credit card protections to their debit cards, which says you are not liable for unauthorized purchases if reported within 60 days, which seems very comparable to CC protections to me. I could have them use a CC but then again I think that teaches some bad habits in terms of personal finance.

Thoughts? I've included the exact verbage from the Wells Fargo policy below if you're interested.

Zero Liability protection
Your Card comes with WellsFargo’s Zero Liability protection,
which provides you with more coverage than what Regulation E
requires for consumer Cards (see “Liability for unauthorized
transactions according to Regulation E” above).
With Zero Liability protection, you will have no liability for any
Card transactions that you did not make or authorize, so long as
those transactions occurred before the end of the 60-day period
described below.
If yourAccount statement shows Card transactions that you
did not make or authorize, tell us at once. If you do not notify us
within 60 days after the statement was mailed or was otherwise
made available to you, you will be liable for any additional
unauthorized Card transactions that occurred after the 60-
day period and before you provided notice to us (if we can
prove we could have stopped those Card transactions had you
promptly notified us). This will apply even to unauthorized Card
transactions that occur shortly before you notify us. If a good
reason (such as a long trip or hospital stay) kept you from telling
us, we will extend the time period.
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Silk McCue
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by Silk McCue »

Their language is crystal clear and unambiguous. Not certain what the question or hesitation is.

Cheers
Jags4186
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by Jags4186 »

The protections are fine, the concern is that if there’s a fraudulent transaction on a debit card actual money is deducted from your account. You then need the money put back by the bank. In the meantime all sorts of things could happen — for example say you have $2000 in your checking account, write a check for rent for $1500, and in the meantime someone charges $1000 of fraudulent charges. Your check bounces. Whole rigamarole. With a CC you just don’t pay the bill until it’s resolved.
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galawdawg
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by galawdawg »

That is more robust protection than many debit cards provide. Of course, one disadvantage that remains is that fraudulent debit card activity can drain the associated bank account. Consequently, there can be collateral losses in the form of dishonored checks and payments and the fees and potential adverse credit score impact that may result. Furthermore, the customer loses access to the funds until the bank credits the fraudulent charges back to the account.

None of those events occur when credit card fraud occurs, instead it is the issuer's funds that are impacted rather than the customers.
sixty40
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by sixty40 »

I actually tell my kids not to use a debit card and to get a credit card as soon as they can so they know about credit, what it is and how to manage it. They really did not really understand what is a credit card.
If managed properly I believe a credit card is the way to to, with all the reasons mentioned by others. However it would be up to them when to leave the nest.
typical.investor
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by typical.investor »

eye.surgeon wrote: Mon Sep 13, 2021 10:43 am I understand that as a general rule debit cards are less protected than credit cards when it comes to unauthorized transactions. I have 2 college kids who both work and have some income and use their Wells Fargo debit cards daily for small purchases. I do like the ethos that debit cards teach ie. spending only what you have immediately available. Wells Fargo has what they call a zero liability protection policy which essentially extends legally required credit card protections to their debit cards, which says you are not liable for unauthorized purchases if reported within 60 days, which seems very comparable to CC protections to me. I could have them use a CC but then again I think that teaches some bad habits in terms of personal finance.
Wells Fargo has a College Credit card. For the first six months, the Wells Fargo Cash Back College Card earns 3% cash rewards on up to $2,500 in combined gas, grocery and drugstore purchases (then 1%).

Points back and builds a credit history.

But yeah the protections on the Debit Card look good.
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nisiprius
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by nisiprius »

(Shrug) I use debit cards and accept the subtle risk and so far it hasn't bitten me.

But one must draw a distinction between legal protections that all credit cards must provide, and voluntary protections that this card is offering as a feature.

These kinds of card features can come and go.

You probably heard about this protection because Wells Fargo was advertising it. If they ever drop it, they won't advertise it. You will get some pro-forma legal notice on onionskin paper in smallish greyish type in among dozens of other changes. Unless you make a point of regularly calling their 800 number and asking if the protection is still there, you might not notice if they drop it. One of my credit cards dropped the car rental insurance feature without my noticing it until I thought to look for it. Fortunately, I didn't need it. Also fortunately, I found that my other credit card had had it all along and I had never noticed it!
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andypanda
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by andypanda »

"You probably heard about this protection because Wells Fargo was advertising it. If they ever drop it, they won't advertise it. You will get some pro-forma legal notice on onionskin paper in smallish greyish type in among dozens of other changes. Unless you make a point of regularly calling their 800 number and asking if the protection is still there, you might not notice if they drop it."

They are a major bank, don't you trust them to treat their customers fairly and honestly?

:shock:

"2 days ago — Federal regulators have hit Wells Fargo with another fine. The financial institution must pay $250-million dollars for failing to move fast ..."
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JoMoney
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by JoMoney »

Not necessarily unique to Wells Fargo, both Visa and Master Card promote a similar statement for their debit cards:

https://usa.visa.com/pay-with-visa/visa ... olicy.html

https://www.mastercard.us/en-us/persona ... tions.html

The key is the users responsibility to report the fraudulent transaction quickly, which means you need to stay on top of reviewing statements, some people aren't good about doing that.
The big (biggest?) risk in my mind is that it's left up to the bank to decide if they will give you a "provisional credit" while they investigate any reported fraudulent transaction. You may have bills unpaid and be out the money while the bank investigates your claim. Many banks will give you a provisional credit over this period, but I don't think that's universal, the last time I asked a bank about this they told me it was on a case by case basis depending on the circumstances and history with a customer. Even before you possibly report the issue and get a provisional credit, you might have a payment bounce before noticing your money is gone and need to file a dispute.
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SimonJester
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by SimonJester »

I have experience with Wells Fargo, Debit Card fraud, and their zero liability protection...

First let me say this is an agreement WF is providing between you and them, however it is not backed by any legal requirement. So it could change at any time. There are a set of legal protections for both debit and credit cards. This would be the minimum you should expect to receive and everything else is a nice offer from the bank. For Debit cards your liability is between $0, $50 and $500 (per the law) and credit cards its between $0 and $50.

Now onto the WF experience, my WF debit card was compromised probably by a vendor leak.

In the matter of just a few minutes I had several hundred charges run through the card from all over the world. I have email notifications turned on for any charges and instantly hundreds of emails started pouring in. I immediately called the number on the back of my card, and while on the phone WFs fraud department was also calling to get ahold of me. The charges then began being denied while I was on the phone waiting for fraud to pick up. This was on a weekend by the way.

Fraud folks canceled the card and issued me a new one. They started the dispute on the fraudulent charges that did make it through. A credit could not be issued until the fraudulent charges actually posted to the account, many were pending at this point. It should be noted that my available balance was reduce by the pending fraudulent charges. Thankfully I had enough money to cover the fraudulent charges and did not have anything pending that would cause an overdraft. Legally they had 10 business days to issue me a credit.

Fraudulent charges took 3 business days to fully post, I called WF back on Wednesday and a temporary credit was issued. It took until Tuesday of the following week to receive my new debit card. Thankfully I had other means for money access.

A few days later I received a mailing from WF, an affidavit to fill out over the charges. I completed this and returned it to WF. A few days later WF determined that it was indeed fraud and my temporary credit would remain.

Some lessons I learned from this. I was amazed at the speed the fraud took place. Literally in seconds I had hundreds of charges from all over the world come in. Only the first few were successful the rest were declined, but over the first 24 hours hundreds and hundreds of charge attempts for some very high dollar amounts. If WF had not caught this in the first few charges the account would have been drained.

Not having access your debit card for a week or so is inconvenient, but I had other accounts with different banks.

The bank can take upto 10 business days to issue you a credit and will not do so on a pending charge only a posted charge.

I no longer use a debit card for ANYTHING other then ATM access. I only use credit cards.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
sixty40
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Re: Thoughts on Wells Fargo Debit card "zero liability Protection"

Post by sixty40 »

SimonJester wrote: Tue Sep 14, 2021 9:13 am I have experience with Wells Fargo, Debit Card fraud, and their zero liability protection...

First let me say this is an agreement WF is providing between you and them, however it is not backed by any legal requirement. So it could change at any time. There are a set of legal protections for both debit and credit cards. This would be the minimum you should expect to receive and everything else is a nice offer from the bank. For Debit cards your liability is between $0, $50 and $500 (per the law) and credit cards its between $0 and $50.

Now onto the WF experience, my WF debit card was compromised probably by a vendor leak.

In the matter of just a few minutes I had several hundred charges run through the card from all over the world. I have email notifications turned on for any charges and instantly hundreds of emails started pouring in. I immediately called the number on the back of my card, and while on the phone WFs fraud department was also calling to get ahold of me. The charges then began being denied while I was on the phone waiting for fraud to pick up. This was on a weekend by the way.

Fraud folks canceled the card and issued me a new one. They started the dispute on the fraudulent charges that did make it through. A credit could not be issued until the fraudulent charges actually posted to the account, many were pending at this point. It should be noted that my available balance was reduce by the pending fraudulent charges. Thankfully I had enough money to cover the fraudulent charges and did not have anything pending that would cause an overdraft. Legally they had 10 business days to issue me a credit.

Fraudulent charges took 3 business days to fully post, I called WF back on Wednesday and a temporary credit was issued. It took until Tuesday of the following week to receive my new debit card. Thankfully I had other means for money access.

A few days later I received a mailing from WF, an affidavit to fill out over the charges. I completed this and returned it to WF. A few days later WF determined that it was indeed fraud and my temporary credit would remain.

Some lessons I learned from this. I was amazed at the speed the fraud took place. Literally in seconds I had hundreds of charges from all over the world come in. Only the first few were successful the rest were declined, but over the first 24 hours hundreds and hundreds of charge attempts for some very high dollar amounts. If WF had not caught this in the first few charges the account would have been drained.

Not having access your debit card for a week or so is inconvenient, but I had other accounts with different banks.

The bank can take upto 10 business days to issue you a credit and will not do so on a pending charge only a posted charge.

I no longer use a debit card for ANYTHING other then ATM access. I only use credit cards.
Thanks for the example, nice to know the process.

My only fraud story was with my credit card quite a few years back. I was shopping at Costco and when I got home I noticed my card was missing, I may have dropped it. It could not have been more than 1-hr. I called the credit card company to close the card, and they noticed there were already fraudulent charges on it, the people went to a service station about 20 miles away and charged gas, goods, fast food, etc., total was less than $200. The card company declined the charges and took care of it. I may have received one more call from the card company to confirm. I received a new card in about 2-3 days and that was it. I do not recall signing anything. Pretty easy.

My father also had some fraudulent charges on his card that he noticed on his statement, they were charges in another state. I called the card company for him, card company said charges were made in person meaning someone copied the card, after some conversations card company took care of it and got it all taken care of in one or 2 calls. Received a new card and that was it, and again very easy.
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