What is direct debit insurance?

Direct debit insurance is protection offered by many financial institutions for the use of debit card. As with credit cards, debit cards allow consumers to make cash and payments. They differ in that they are usually associated with some type of cash account, such as a check -up account. Direct debit insurance protects the card holder from unauthorized purchases. The limitation and regulations may vary depending on the issuing financial institution. Most require that suspicious purchases and unauthorized transactions be reported within a certain time frame. The card holder is usually returned for purchases that have been made without his knowledge or permission. The bank usually cancels an incorrect or stolen card and issues a new one, but in the meantime, the account holder is protected from disposing of his account. Since the direct debit card deducts the actual accounts from the account, the risks associated with the stolen debit card card may be higher than the credit card.

Some direct debit insurance provides guarantee and prices for purchases. The standard warranty of the manufacturer can be extended to a certain period of time. With price protection, if the lower price is found on the same item in a certain time frame, the card holder is returned for the difference. There are also some insurance programs that will allow card holders to get a replacement for purchases they were not satisfied with.

This type of scenario occurs when a retailer refuses to replace the card holder and the item is required to be a faulty or some type of exchange. Some stores do not receive a debit or credit card transaction statement as proof of purchase. Others have a strict return and replacement policy that the card holder may not be able to follow. Usually, a dispute process is initiated and there is a limitation to the amount that can be returned.

There are financial institutions that provide monitoring of security of security andIdentity in their direct debit insurance. This helps protect the card holders from unauthorized use of their cards and provides access to any changes in their financial information. Some customers are able to set specific passwords for online purchases, which further helps reduce the risk of fraud.