Debit Cards

A group of state attorneys general, including California's, has opened an investigation into whether new debit cards being issued by Visa International Inc. and MasterCard International Inc. will harm competition. Eleven states are examining "possible anti-competitive effects against regional ATM debit cards," said Todd Boyer, a spokesman for Ohio Atty. Gen. Betty Montgomery.

FNet Corp., a subsidiary of Franklin Telecom in Westlake Village, has issued its first commercial prepaid telephone debit card for calls originating within the United States. FNet debit cards are already in use in Europe and South America. The marketing launch of this product came after two years of intense planning, company officials said. FNet CEO Jim Magruder said his company's network allows the user to bypass traditional public telecommunications networks and reduce long-distance costs.

Bank One Corp. said Sunday that Visa USA Inc.'s recent $2-billion settlement of a debit-card lawsuit would cost the sixth-biggest U.S. bank $60 million a year in retail debit card revenue. The Chicago-based bank, which made the disclosure in a filing with the Securities and Exchange Commission, has nearly 5 million debit card users, company spokesman Tom Kelly said. Bank One also is the largest issuer of Visa credit cards in the world.

Customers of Wal-Mart Stores Inc. can use MasterCard Inc.'s signature debit cards to make purchases for the first time since February, when the world's largest retailer suspended their usage in a disagreement over fees charged to merchants. Bentonville, Ark.-based Wal-Mart said in December that MasterCard's fees were too high. The move made Wal-Mart the first major retailer to take such action since a lawsuit settlement freed merchants to pick which credit and debit card services to use.

Jeanette Thompson is a grandmother and office manager who has constant pain in her hand from arthritis. Most arthritis drugs, she said, "feel like they are burning a hole in my stomach." Her doctor prescribed Celebrex, a newer anti-inflammatory that eliminates gastrointestinal irritation. Her insurer, United Healthcare, refused to pay, saying that she would have to suffer with older, cheaper drugs like Naprosyn until her doctor proved she was developing an ulcer. So much for preventive medicine.

About 40 debit-card users in the Huntington Beach area had money stolen from their bank accounts over the last few weeks, most after shopping at a local supermarket, police said Friday. Such debit-card crimes are becoming increasingly common, security experts say, with thieves peeking over shoulders to learn personal identification numbers or employing more sophisticated hacking techniques.

Americans buying stamps or mailing Christmas parcels can use credit cards for the first time this holiday season. More than 6,000 post offices have been connected for credit- and debit-card use in the last five months, Postal Service Treasurer Stephen Kearney said Friday. Credit-card trademark stickers on the door--just like stores and restaurants--identify the offices accepting the cards.

Consumers who purchase items with debit cards may not give much thought to whether they sign a receipt or punch a personal identification number on a keypad, but to lawyers set to debate the issue today, the distinction is crucial. The routine debit transaction is the subject of a trial seven years in the making, pitting Wal-Mart Stores Inc. and millions of other retailers against Foster City, Calif.

What happens in Costa Mesa can end up in Vegas, some unhappy victims of debit card fraud have learned, authorities said Friday. More than 440 people who used debit cards to pay for gasoline at two Costa Mesa service stations have reported funds stolen from their accounts in Sin City, said Sgt. Martin Carver, a spokesman for the Costa Mesa Police Department. Debit card information and personal identification numbers captured the week of Sept. 29 to Oct.

Q: Can you explain why in the world any consumer would possibly want a debit card? For the life of me, I can't imagine why these pieces of plastic are preferable to either checks or credit cards. --M.T. * A: First, as a quick refresher: Debit cards function as electronic checkbooks, allowing customers to tap their checking account balances to pay for goods or get cash at stores.