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Debit Cards & Commercial Accounts

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Question: 
What are the legal drawbacks for offering debit cards on commercial accounts?
Answer: 

You must clearly define the liability limits for each party involved. Reg. E isn't applicable. You could impose similar requirements but you'd put your institution at a disadvantage. You'd want more liability shifted to the customer, who doesn't want it. And if this commercial customer will be giving the access device to others, they won't want liability if funds are stolen from them or the data to use that card is compromised by someone who otherwise has nothing to lose.

Lastly, verify that if you issue a branded debit card, that your agreement even allows commercial accounts to have that branded card.

First published on BankersOnline.com 1/9/06

First published on 01/09/2006

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