Protect Your Ministry's Plastic

You’ve heard it in the checkout line a hundred times: Debit or credit? The question may seem trivial, but if a ministry’s card is hacked or stolen, the type of plastic could mean the difference between a sigh of relief and losing thousands of dollars.

Business Debit Cards: Different From Personal Debit

When it comes to debit cards, churches and secular businesses do not receive the same federal liability limitation protections as individuals. If a business or ministry has its debit card hacked or stolen, the federal government does not protect against unauthorized charges. That means the church could be on the hook for all charges thieves rack up on a debit card.

Some business debit cards feature Zero Liability protection against unauthorized purchases, but not all do. Church administrators should check with their financial institution to see if the church’s debit card carries this protection.

Limited Protection on Credit Cards

Business credit cards receive very limited protection from the federal government under the Federal Truth in Lending Act. In most cases, liability is limited to $50 per card, but only if two conditions are met:

• The company issued fewer than 10 credit cards.
• The person who made the unauthorized charges isn’t an employee.

If either of the criteria is not met, the business or ministry could be required to assume full liability for any charges. As with debit cards, certain credit cards feature protection against fraud; the bank or card provider will have more information.

What Ministries Can Do

To limit opportunities for debit or credit card fraud, ministries can take several steps:

• Avoid using a debit card unless it features protection against fraudulent charges.
• Limit the number of credit cards issued to the church to nine or less.
• Assess who should have access to the ministry’s debit or credit cards.
• Carefully monitor ministry accounts by using online banking tools. If any unauthorized activity appears, call the bank or card provider immediately to report it and prevent further damage. Some banks and credit unions provide automatic fraud monitoring services for their customers.
• Consider other options for transferring your risk of a loss. Letting a bank, credit union, or card issuer assume the primary risk is generally the best option—usually by obtaining cards with zero liability protection. Talk with a Brotherhood Mutual agent to find out about insurance coverages which could also provide some protection for your ministry’s finances.

Individual states may offer expanded protection against debit or credit card fraud. Ministries should check with a local attorney for clarification on local laws.

For more information on federal protections, refer to this article from the Federal Deposit Insurance Corporation (FDIC). Brotherhood Mutual