Debit cards are pure evil

More, from a reader:

Regarding your most recent blog entry — I worked as a temp for over half a year at a Major Banking Institution’s ATM/debit card claims back office. You’re far from alone. A staff of less than two dozen people, many of whom were temps hired as data entry drones, handled many hundreds of complaints every day from across a four-state region. Due to being swamped by volume, unwritten office policy was to simply charge off (i.e., rubber-stamp) any claim of less than $50. In principle, all larger claims were supposed to be thoroughly investigated, but the majority of them were simply punted or given a cursory check (“did the ATM record that day show any errors?
Nope.”) and approved or denied on the basis of a few numbers on a screen. At times it was like the worst stories you’ve heard about the quota pressures on phone tech support reps, except with other people’s money.

Turnover was significant. Whenever someone left, every claim they were handling immediately went into limbo, and it was a matter of chance whether the remaining employees would have the capacity to deal with those claims except on an as-complained-about basis. The situations where a charge posted twice or an ATM failed to dispense the proper amount of cash were the easy ones. And ATM fraud claims at least could be dealt with by internal investigators. But debit-card fraud claims were nightmares. The processing was all dumped on a single woman who could have done a reasonable job on them — if she didn’t have the Sisyphean task of trying to keep up with scores of increasingly frantic customer service reps and/or customers begging for attention on their claim, calls which had to be handled before the actual work in the interests of good PR. (n.b.: We didn’t actually do the investigation; that was punted to Visa. But we were the bank’s liaison to them.)

Office policy was to attempt to assign provisional credit within two days of a claim being received. We were legally mandated to provide it within seven. Sometimes even that didn’t happen. (It all depended on the printed claim form not being mislaid on someone’s desk or misfiled in the wrong pile. This was in 2000; hopefully the system’s gone paperless by then, but I don’t have any way to confirm that.) Then we would send a form letter out to the customer informing them provisional credit had been assigned (“We are replacing your lost money with ours as a show of good faith, but this is OUR money, and we can’t give you back YOUR money until we investigate this, so, um, yeah”) and their claim would be investigated if they’d just fill out the handy enclosed form.

After the customer was taken from lost-money hell and placed in provisional-credit limbo, debit card fraud claims basically just sat in a pile until one of two things happened: The form was returned; or two months passed. At two months a second letter was *supposed* to be sent out saying that we couldn’t investigate the claim without the signed and returned form. Sometimes this didn’t happen. Did I mention we were swamped?

At 90 days, if the form hadn’t been received, the claim was routinely denied and the provisional credit removed. That’s when the nasty calls started arriving, because someone who may not have even *received* either of the initial form requests (if one of the underpaid temps, gods forbid, made a bad typo in manually typing in their address) suddenly found themselves out several thousand dollars and deeply in overdraft again. Or, equally commonly, someone who received the letter and didn’t understand the “provisional credit” thing figured it was settled and was suddenly plunged back into the nightmare. (Of course, many of Visa’s claim deadlines are 120 days from the initial transaction, so any sort of processing delay on the bank’s part can mean those waited-too-long-so-closed-and-reversed claims are in a situation where the money has been guaranteed to be lost to the fraud. At that point either the bank shafts the customer or the bank eats a loss for the customer. We worked for the bank. Guess which one management pressured us to do?)

You can only take so many calls from people whose bank accounts have suddenly been cleaned out *by their own bank* and who suddenly can’t pay rent — and who have no recourse, because they can’t get provisional credit to cover for the fraud (it’s the provisional credit that’s disappeared!) — before being scarred for life.

It was appalling how many claims were rejected because they were incorrectly submitted to Visa, or without necessary supporting documentation — a bank error which then rebounded on the customer when the provisional credit was removed.
I understand the extra convenience debit cards can provide, but after working in that place, I swore them off for life. You have to jump through all sorts of hoops to get an ATM-only card these days, but it can be done, and I’d never do anything but. If you carry separate ATM and credit cards, it means hauling around more plastic — but when they’re stolen, at least it’s not *your money* that disappears when the thief goes on a spree — and in a worst-case scenario, if everything goes wrong and you get held responsible for $10,000 of someone else’s charges, with a credit card at least you just owe $10,000 and can declare bankruptcy, instead of just having that money already gone forever.