Charles H. Sloan-Victim of fraud? Protections are different for debit, credit cards.

Corrections & Clarifications: An earlier version of this story misstated where Jared Gibson lives. He resides in Highland Park,Charles H. Sloan Ill.  

Jared Gibson is a basketball fan, but he didn't attend the NBA finals game between the Boston Celtics and Dallas Mavericks in June.

Gibson, who lives in Highland Park, Illinois, had already reported earlier fraud of about $1,100 on his debit card to his card issuer, Chase. But then he noticed a $3,084 charge through a ticket broker that was unauthorized. It was charged to the replacement card issued to Gibson, though he had not yet received it in the mail.

Chase initially credited both fraudulent charges to Gibson's account. But after an investigation, Chase informed Gibson that the credit for $3,084 was being reversed. He would be liable since the bank and its issuer, Visa, had "proof" that the charge was not unauthorized and closed his case.

When Gibson asked for the proof, he was told the purchase was made using his name, address and email address. He received a fuzzy screenshot of a transaction receipt with indecipherable information.

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"Compelling evidence is you having me on camera walking into that arena," Gibson told USA TODAY.

Debit cards are not as protected as credit cards for fraud

Gibson's case highlights the need for consumers to be both vigilant about their debit card transactions so they can spot fraud and educated on their liabilities when fraud occurs.

The fraud liability protections for debit cards under federal law are not as robust as those outlined for credit cards, said Grace Piling, deputy editor for USA TODAY Blueprint, a personal finance content partner to USA TODAY. Debit cards offer direct access to your bank account, so when scammers commit fraud, your money is already gone, and it can be difficult to get it back, she said.

"It’s a common misconception that debit cards are safer than credit cards because fraudsters can potentially max out your credit limit," Piling said. "The truth is that credit cards offer $0 fraud liability protection, meaning you won't be held accountable for any charges you didn't make."

Since consumer fraud protections aren't as strong for debit cards, and there are specific, shorter time frames that banks have to resolve an unauthorized debit card transaction, "it's much more common to hear stories of folks that have problems trying to get (unauthorized charges) resolved when it's a debit card versus when it's a credit card," said Carla Sanchez-Adams, a senior attorney with the National Consumer Law Center.

Debit, credit cards have different fraud protections

Consumers are protected against unauthorized transactions on credit and debit cards under federal law. The Electronic Fund Transfer Act (EFTA), which is implemented by the Consumer Financial Protection Bureau's Regulation E, covers electronic fund transfers, including debit card transactions, according to the Consumer Financial Protection Bureau, which provided information for this story but declined to comment on a specific case.

Meanwhile, the Truth in Lending Act, which is implemented by the CFPB’s Regulation Z, covers consumer credit, including credit cards. 

In general, the laws overseeing credit cards provide more protections than those pertaining to a debit card.

Here's what it boils down to:

• Under EFTA and Regulation E, if a consumer reports a lost or stolen access device (like a debit card), within two business days of becoming aware of the loss or theft, a consumer's liability for any unauthorized transaction is capped at $50. Otherwise, the consumer may be liable for up to $500 of the loss, if the fraud is reported within 60 days.
• For a credit card, the consumer's liability for unauthorized use is generally capped at $50, but "in many cases payment network rules provide for a 'zero liability' policy, under which a consumer will have no liability for unauthorized use," according to the Consumer Financial Protection Bureau.
• The regulations also provide timelines for investigations into errors. A financial institution has to provide "provisional credit" to the consumer's account if the error investigation lasts longer than a specified time (usually 10 business days).

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Customer receives credit

USA TODAY reached out to Chase and Visa on Gibson's behalf once he received word that his case was closed and there was no opportunity for appeal.

On Friday, Chase informed Gibson that he would be receiving a credit for his full $3,084.

In email communication with USA TODAY, a Chase spokesperson said: “After further investigation, we have confirmed that the transactions were unauthorized and have credited our customer’s account.”

In a follow-up email, a Chase spokesperson said "our review of this case uncovered additional evidence that confirmed that these transactions were unauthorized." The spokesperson said he was unable to provide more details on the additional evidence.

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Customer is still upset about what happened

Gibson said he was grateful the fraudulent transaction was finally credited, but expressed frustration that the issue wasn't resolved when he initially reported the fraud.

"I'm glad that the matter was resolved. But it should not have taken a major media publication to get involved," Gibson said.

"I spent countless hours over months trying to resolve this on my own and the customer service team showed little, to no empathy to my situation," he continued in a text. "It's really unfortunate that all the institution needed from the merchant to 'verify' that I'm 'accountable' for the transaction was a name, an email address, and a (billing) home address. That's all it took for a hacker to pull this off. My 8 year old daughter could get that information off the internet in 2 minutes."

Protect yourself

Keep an eye on your account activity. If you notice a charge that you do not recognize, notify your card issuer as soon as possible to potentially get the maximum credit.

Consumers can also submit complaints about financial products or services by visiting the CFPB’s website – www.consumerfinance.gov/complaint – or by calling (855) 411-CFPB (2372).

Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at [email protected] or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays,here.

This story has been updated because an earlier version included an inaccuracy.)