All my credit and debit cards state on the back above the signature specimen block “Not Valid Unless Signed”. I’m curious as to what exactly that means. If I make a purchase with an unsigned card, could it possibly absolve me of liability for the purchase price? Or, at the very least, does it mean that I am not subject to the terms and conditions of the cardholder agreement, including binding mandatory arbitration? Would my only liability be quantam meruit to the issuer (or to the merchant if the issuer refused to pay and the merchant didn’t meet PCI standards)? There’s no published case law on this.
What work is the “not valid unless signed” language really doing? Surely my signature isn’t necessary for me to be contractually bound. Card usage alone should be sufficient, but the signature language might raise the consent bar. Signature specimens are checked so rarely and so perfunctorily at that that one has to wonder whether they serve any serious security function other than for maybe providing a comparison specimen for contested transactions. I wonder if this is an example of contractual form language that has outgrown its purpose, but that no one is bold enough to delete.
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9 responses to “Not Valid Unless Signed”
I think that its function is not tied to the card holder, but to the place in which you are using the card. That “Not vaild unless signed” message is directed to the (let’s say) shop. Although it is more and more common everyday to use just the number, expiration date and security code, when presenting the card the shop should check the identity of the user/holder and the signature is intented to serve for that purpose. I do not think that using an unsigned card would mean that the holder is not tied to the contract terms, as the relevant signature is not the one of the card but the one in the agreement (or, maybe be, the supposed signature of the agreement derived from the use of the card).
I purchase everything with credit cards (an AmEx, usually), but keep zero balance. I also travel for business fairly often. About a year ago I noticed that gas station pumps started asking for my billing zipcode whenever I was away from home. Then, about 2 months ago, I noticed that I am routinely asked for picture ID when using a credit card.
A positive development I think.
Years ago I had a big box store deny a transaction since I had followed the advice to write “SEE PHOTO ID” in the signature block instead of signing it. Ah, literal mindsets after getting burned…. (I was too pissed-off to try writing “SEE PHOTO ID” on the credit card slip, and I could tell this was a situation where the manager would then demand I present a driver’s license in the same name.)
As for the signature blocks today — I wonder what fraction of purchases are signature-free already. Nearly all of my transactions are at the gas pump, a signature-free lunch, or online purchases. Wouldn’t this be analogous to the case where you forget to sign a check? The action alone (using the card, mailing in a check) is considered sufficient proof of consent for the transaction to go through?
http://www.zug.com/pranks/credit/
The “not valid unless signed” language is a reminder to the merchant of network rules, intended to minimize losses from unauthorized transactions. In a “card present” transaction, the chances of a thief making an unauthorized purchase are less than for an on-line purchase because the thief needs the physical card, not just a stolen card number. The signature provides another level of security, in theory, because even a thief who has managed to obtain physical possession of the card may not be able to effectively forge the signature. This method (the merchant verifying the signature) only works if the cardholder has previously signed the card, and if the merchant’s employees actually compare the card signature to the signature on the charge slip. Network rules also allow ignoring the signature for small dollar transactions, I believe. The liability of the cardholder for the charge does not depend on the presence of a signature on the card.
Re: pranks link. I had a ‘usename’ for years before I eventually decided to legally change my name. A ‘usename’ is like a nickname, but unlike the latter it totally replaces your ‘real’ name on everything but legal documents that require your ‘true name’. The classic example is Jimmy Carter.
So after that encounter at BB I did a lot more research into this than the average layperson. For instance, banks don’t care (or didn’t care, pre-9/11) what name you use on your checks and credit cards as long as you pay your bills.
You have the right to use whatever name you want as long as it’s not for fradulent purposes. You don’t have to ask permission either, just use it.
Signatures don’t have to be your ‘true name’ in cursive — that’s just a convention. They can be anything. The only thing that matters is that they’re a tangible mark indicating assent.
They don’t even have to be on the signature line. The classic example here is the ‘accidently’ unsigned check. Courts have held that a hand-written but unsigned check is still a valid instrument.
That said, there are countless practical reasons why you don’t want to use aliases and non-traditional signatures casually. But that doesn’t mean that the UCC and state laws haven’t considered the issue.
It also leaves the issue of totally unsigned credit cards open. It’s one thing for me to put a mark, any mark, on paper to indicate I agree to a charge. But what about signed cards used in signature-less transactions?
P.S., the prankster? I would have jotted down his driver license info and told him that, why yes, that was still a valid legal signature and when would he like his new TVs delivered. Two can play that game. 🙂
I think that’s a great question — something I’ve secretly wondered myself but never took the time to ask.
I haven’t signed my credit cards for years. Why would I want to give a thief a copy of my signature if my card got into the wrong hands? Up until apx 5 years ago that worked pretty good and I was asked for ID at least 50% of the time I used my card.
Then what happened? I don’t know. The only time I’m ever asked anymore is checking into a hotel and they would ask anyway.
It’s my belief that stores aren’t require to give out receipts for charges under $10 anyway.
I should write in and tell that prankster guy that he needs to make a charge to a foreign company. That gets my Visa locked constantly and it’s never more than $20 USD. I have complained a million times against doing that.
Yet Visa has no trouble accepting a recurring subscription to a site I had never heard of and refused to take it off my account.
Visa has too much control over internet business transactions. If they don’t want to accept a retailer, that retailer is doomed.
As I recall, the reason for the signature plate on the back of cards was originally to satisfy the requirement under the Fair Credit Billing Act (from the 1970s) regarding liability for unauthorized usage of credit cards. As most everyone knows, such liability is generally limited by law to $50 (or less if the consumer provides timely notice to the issuer and thereby enabling the issuer to ‘shut down’ the account.) However, in order for issuers to deduct even the now almost nominal $50, they have been required by regulation to provide “…a means to identify the cardholder on the account or the authorized user of the card.” [ Reg Z, Sect. 226.12.(b)(2)(iii) The signature — and the capacity for the sales clerk to visually compare it with that on the signed slip — is the “means” for doing so. Without such a means, there is, by law, NO liability to consumers for unauthorized usage. There’s a similar provision in Reg E for debit cards.
Many in the banking industry felt that without at least some liability potential for cardholders, there would be no incentives for consumers even to bother to notify their issuers when they thought their cards might have been compromised.
Similarly, about 10 years ago, VISA and MasterCard made huge PR splashes about their so-called ‘zero liability’ policies (which were introduced essentially to forestall Congressional strengthening of The EFT Act). They stressed how much supposed ‘benefit’ consumers would get in particular when using cards for Internet purchases. The irony, of course, was that using their signature-based cards — debit or card — for internet transactions allowed for NO liability to consumers for unauthorized usage (under the FCBA and the EFTA) because when the cards were used over the Internet (or in MOTO transactions as well), there was functionally no “means” for the identification of the cardholder or authorized user. Indeed, one of the perversities of ‘Verified by VISA’ (an authentication procedure essentially involving the use of a PIN-like identifier adopted later by VISA) was that it legally satisfied the statutory provisions and thus theoretically enabled issuers to assess cardholders for the limited amounts specified in the pertinent statutes; i.e., it actually provided for INCREASED legal (if not contractual) liability. From a PR standpoint, more sizzle than steak.