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Why your bank may not help you if you pay by ec-card and PIN

Laptop with card reader - ©Can Stock Photo Inc. / MultiartOne of the most popular ways of paying for things  in shops in Germany is by ec-card – a standardised debit card that is issued by most banks and accepted by most shops. The card, which has a both a magnetic strip and a chip on it, generally comes with a PIN and you enter the PIN when paying to confirm the transaction, although some older card readers still require you to sign a slip of paper instead.

The money is debited from your bank account in a similar way to a direct debit (“Lastschrift”), but the similarity stops here. Because whereas a direct debit can be reversed within 6 weeks, I recently found out that such protection is not offered when paying by PIN.

My problems began when I bought petrol using my ec-card on the motorway in Belgium. The petrol pump was one where you insert your card before filling up to release the petrol. I filled up and wanted a receipt, but although the terminal offered me one, it did not print it. A similar problem happened to the person at the pump behind me, so we both went into the shop to ask for one, but not until I had taken a photograph of the pump’s display on my mobile phone.

Inside the shop, there was no sign of a receipt either at first. “It can take a moment for it to appear on the computer” we were told, and a few minutes later the receipt for the other customer did appear. But not mine. After some discussion about which pump and the amount someone decided to re-start the computer controlling the till – and out came my receipt.

The shock came that evening when I checked my on-line bank account and saw that it had not been debited the €65,67 that the receipt showed, but with €120,00 – almost double the amount!

It was too late to the bank, so I fired off an e-mail to them explaining the problem, attaching a scan of the receipt and asking them to call me urgently the next morning.

However the next morning I received a reply that stunned me completely. “We cannot say with 100% certainty that the debit to your account is the receipt, because the subject (“Verwendungszweck”) is ambiguous. Although the date and time of the debit match the receipt and the name of the petrol station is in the debit instruction. As the payment was made by entering your PIN we cannot reverse the debit and you will have to sort out the problem with the petrol station locally.”

In other words, it was up to me to go back to the petrol station, which was by now about 300km away, and get them to correct their debit from me account.

I was not going to accept this and called the bank. Speaking to the central office rather than my branch, I explained the problem that I had had in obtaining a receipt at all and that I had photographic evidence of the amount as well. My PIN guaranteed that amount, but surely it did not guarantee the transaction if the vendor debited a higher amount?

Luckily I was speaking to someone who probably had more experience of these transactions and the moment they heard that I was talking about a petrol station in Belgium they realised was going on and explained it to me.

When you insert your card to release the petrol, the station effectively does a credit check on you by asking your bank to reserve €120 the expected debit. This permits the pump to give you up to €120 of petrol and takes place in real time. Once you have actually filled up they revoke the reservation and debit the actual amount owed. For this transaction they have several days. The advice was to wait a few days and see if this happened, because if it did not then the reservation would be cancelled automatically by the bank.

Relieved at this competent and informative statement I waited. And sure enough, the next day the €120 disappeared and €65,67 was taken off my account.

However the episode was not without a consequence for the bank. I was impressed that someone knew exactly what was going on, but not that my branch would not help me. Having had a couple of other bad experiences there since my advisor of 10 years got promoted and a new team took over, I decided it was time to leave the branch that I had remained loyal to for 19 years.

I learnt two important pieces of information from that trip:

1. If you have to insert a card in the petrol pump before you start filling up, then your account may show a debit for a higher amount for a few days.

2. If you pay for something using your PIN, and for whatever reason – computer error or vendor fraud – the bank will not help you and you’re on your own. It’s between you and the vendor. Maybe it’s a good reason to pay cash?

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2 Responses to “Why your bank may not help you if you pay by ec-card and PIN”

  1. K says:

    Very informative! It’s always good to read useful posts like this. Thanks!

  2. Y says:

    Actually the EC Card ceised to exist several years ago! While you still see the logo at merchants, it has mostly disappeared from german bank cards (replaced by MAESTRO or VPAY)It is a little buit complicated now but if you pay with PIN, then you pay with your MAESTRO (debit) card, if you sign, then you pay via what’s called ELV (direct debit).
    Since the Devbit Card schemes do not offer a “blocking” of an amount like a credit card, the described process is the alternative. While this happens only in a few cases where the merchant would want to ensure there is enough money on the card (Petrol, Car rental, Hotel Booking) I agree that if something goes wrong, it is not pleasant to deal with if the merchant is far away. Credit cardss offer al ittle bit more protection in that senese, but even here, PIN based transaction are becoming the norm (actually they are mandatory in Europe since 1.1.2011) and with that there is a liability shift.

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