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