Can a Merchant Charge a Debit Card Without My Permission?

A merchant cannot charge a debit card or a credit card without your permission. There are situations when merchants may put through a charge, but they are rare and usually involve other issues. For example, occasionally, you make a purchase and the merchant's credit card terminal freezes. The merchant re-enters the transaction, but both attempted transactions go through. Also, you might experience identity theft or a person may locate your account number and put through a transaction you have not authorized. However, merchants cannot knowingly charge your debit card without authorization.

Credit card terminals -- whether counter top, hand held, or wireless -- communicate much like computers. At times, their signal is interrupted or gets "lost" in cyberspace forever -- or for just a moment. Should the merchant re-transmit the data, your transaction sometimes is recorded twice. You may not realize the double charge unless you notice a lower account balance or see the excess charge on your next bank reconciliation. You can ask the merchant to record a reversal or have your bank put through a "charge back" for you.

You need not lose all of your personal information to suffer an unauthorized charge to your debit card. Should someone "steal" your debit card number, he could generate unauthorized charges, without having access to your other identity information (Social Security, bank account or credit card data). Merchants may not request other identification for card present transactions and e-commerce transactions leave merchants little choice but to put through sales to a valid card. Because you need to enter your personal identification number (PIN) for a debit transaction, you have another level of identity theft protection versus a credit card.

Desperate merchants may sometimes put through unauthorized debit card charges, but this event is rare. First, they must have access to your debit card or, at least, to your card number. There is a difference when using a debit versus a credit card. Debit cards do not require your signature. Should a merchant gain access to your debit card number, he might be able to process a transaction without your permission. This impropriety is more difficult to achieve with a credit card transaction requiring the card holder's signature. Also, use of debit cards usually requires you to enter your PIN. No one, including merchants, should have access to your PIN.

Because merchants cannot charge your debit card without your permission, you have remedies to correct these charges. Most banks offer you some "fraud protections" for debit card transactions. However, you may have to wait two to three weeks to get your money back. Banks may take a few weeks to investigate your claim of unauthorized charges. The protections offered for debit cards are different from those for credit cards. Debit card transactions immediately reduce your account balance and are like cash withdrawals. While unauthorized transactions are prohibited, when they occur, your bank must investigate the circumstances and evidence.